text:
Corazon Aquino's First State of the Nation Address

Please be seated.

Mr. President of the Senate; Mr. Speaker of the House of Representatives; members of both houses of Congress; the Vice President and the members of the cabinet; the Chief Justice and the Associate Justices of the Supreme Court; Your Excellencies of the Diplomatic Corps; distinguished guests; Ladies and Gentlemen,

Fifteen years ago, in this season of the year, my husband stood in the Senate and delivered what turned out to be the valedictory of Philippine democracy. He exposed the conspiracy to place the country under martial law, dissolve the Congress and set the stage for the unremitting plunder of our patrimony, and the degradation of our great name and honor.

The dictatorship’s last mockery of democracy was committed in this hall, where the loser was proclaimed winner of the Snap Election. Today I join you in rededicating this hall to true democracy.

The route to these Chambers was long and difficult, fraught with danger and paved with sacrifice. The electoral contest just completed has been exacting for all and bitter for some. But the Nation has spoken. The complete leadership of this country has been chosen; the configuration of their powers and duties permanently set by the new Constitution.

An election is as much an expression as it is an exercise of the national will. We have been made instruments of this will. Our performance will bear witness to its wisdom.

It is my duty under the Constitution to apprise you now of the State of the Nation – but henceforth its continuing progress shall be our common accountability.

The Economic Program

When I took power in this country 17 months ago, I was immediately called upon to deal with the dangerous combination of a severely distressed economy and a growing insurgency; threats which fed on each other and on the hopelessness and confusion which prevailed. Production had contracted by 11 percent for two consecutive years, bringing unemployment rates to double-digit levels. Twelve percent of the labor force, nearly 2.6 million workers were unemployed. (And up to now, 750,000 join the labor force every year.) Real per capita income had been set back 10 years. New investments had dried up and business confidence was at an all-time low. Interest payments on a $26.3 billion external debt took almost half our export earnings. And as I must stress yet again, no part of this debt benefited, or perhaps was even seriously expected to benefit the Filipino people. Yet their posterity to the third generation and farther are expected to pay it.

Poverty blighted the land. Five million families (or 59 percent of the total) lived below the poverty line, as compared to 45 percent in 1971. Dictatorship had done nothing but make more of our people poorer.

It also made us sicker. The prevalence of malnutrition among our young and the incidence of birth fatalities had risen at alarming rates.

In short, I inherited an economy in shambles and a polity with no institutions save my Presidency to serve as the cornerstone of the new democracy that we set out to build.

I had taken the oath to be President of a country that had lost everything, everything but honor. But with honor came a renewed faith in national leadership and in the ability of our race to change things for the better given the will and the courage to do it.

I responded with an economic reform program aimed at recovery in the short, and sustainable growth in the long run. More concretely, it addressed itself to the basic problems of unemployment and underemployment, and the consequent mass poverty.

The program calls for comprehensive structural reforms of the internal economy, complemented by no less important external economic cooperation.

There are two basic features of this program:

The first is its comprehensiveness with respect to structural reforms. We have come to regard the scope of reform not as a problem, but as a challenge, as necessary as it is ambitious; and as realizable as the strength of our commitment allows.

The second basic feature is its reliance on the private sector to carry the main burden of growth. We have reaffirmed our faith in private initiative to propel and sustain our economy. Our premise is that, for as long as free market forces dictate the dynamics of the business environment, the private sector will respond aggressively. As a corollary, the program defines and limits government’s participation in the economy.

Internal Structural Reforms

The dictatorship gave special privileges to government corporations and select individuals. In their various forms these enterprises had several things in common: They enriched the few at the cost of impoverishing the many. They distorted markets and factors of production. And they bore the aspect of legitimacy that made challenge and change impossible.

We abolished these monopolies and special privileges and the effect was felt almost immediately. Fertilizer prices dropped 33 percent and farmgate prices of copra nearly doubled in 1986. We trace in part the renewed vigor in agriculture and the general economy to these and similar measures.

We committed ourselves to a fair and transparent trade liberalization program that is consistent with the country’s continuing weaknesses. Some 1,000 items were released, from a complex bureaucracy of licensing requirements, into a regime of rational tariff protection.

We removed price controls which had been an almost permanent fIxture of the past regime. And yet inflation was less than 1 percent for the whole of 1986 and our estimates place it at an average of 1 percent for the first half of this year.

We instituted tax reforms to shelter the poor from onerous taxes and equitably redistribute the tax burden. We created an Asset Privatization Trust and a Committee on Privatization to start the divestiture of government control or participation in private business and, with the Sequestered Assets Disposition Authority, to help fund the Comprehensive Agrarian Reform Program that I enacted last week.

External Cooperation

Recession hit the international economy in the early eighties. Every economy suffered, but the heaviest toll was taken on the fragile economies of the developing nations. One of the worst hit was our own. The dictatorship had already borrowed heavily, exceeding the debt ceiling mandated by law, when interest rates shot up. Meanwhile, a material portion of the debt had gone to projects that offered virtually no hope of payback. Conceived to either line pockets or inflate egos, these projects would never contribute to the repayment of the debt.

The domestic structural reform program we have initiated cannot be pursued in earnest unless the necessary financing is made available. Fresh funding is needed to effect adjustments in the industrial structure, to assist new ventures, and to support our social programs. This funding cannot come from the domestic economy. Low domestic incomes cannot generate the required savings. Meanwhile debt service was taking half our export earnings. Rescue could only come from foreign sources, both official and private.

Our appeal for external economic cooperation was aimed at gaining increased flexibility in our domestic resource management. The program required a reduction in our debt burden and increased support from bilateral and multilateral institutions. Simply put, we needed to buy time for our structural reforms to start paying dividends. And time is money. While a fool and his money are easily parted, we have discovered that our foreign creditors are not such great fools as the past leadership of our country.

It is my sad duty to report to you that the results of the recently concluded debt renegotiations are far short of our expectations and, more importantly, of our urgent needs. Let me put it bluntly. Our extraordinary achievement in fulfilling the first requirement of renegotiation, the establishment of free and responsible Government, gained us applause but no substantial accommodation from our foreign creditors. The saga of democracy had made great television, but no appreciable change on their business priorities. We were treated not much better than other debtors, even those who had rejected the austered discipline mandated by restructuring. A discipline we had readily accepted. Incredibly, despite the significant reduction in country risk effected by the democratic restoration, we were not accorded the terms given other countries, which got longer periods, better rates and greater latitude for growth.

We cannot help but feel that our foreign creditors took undue and unfair advantage of the internal difficulties we have had with factions intent on subverting this Government and destroying our democracy. Under the continuing threat of a cutoff in trade credits, which would have given new vigor and a signal to seize the moment to the enemies of democracy, we had to relent and sign the accord.

Nothing is more revealing of the tenor of the negotiations than the insistence that our Government assume the liability of Planters Products to a consortium of banks. Their private risk would have to become our public liability. Nonetheless, the demand stood and provided the none too subtle coercion – sign or face the prospect of a protracted delay in the finalization of the debt restructuring program agreed to in March 1987.

We do not bow our heads in shame, for the shame is not ours. Yet even as necessity has forced our hand to agreement, we vow never again to let the patrimony of this nation lie at the feet of these noble houses that have finally shown the true face of foreign finance.

For the record, our foreign debt stands today in excess of $28 billion. The increase from $26.3 billion when we took power is largely accounted for by the weakening of the dollar against major currencies. In the next six years, we shall have to pay $20.4 billion to our official and private creditors. Net payments could average 5 percent of our total output. Close to 40 percent of Government expenditures and over 45 percent of our projected merchandise export earnings, or 27 percent of all foreign earnings, will go towards servicing this debt. The bottomline, honorable members of Congress, is that we have been left little room for domestic error. It is for this reason that I have yielded more to prudence than desire in the reform measures I have enacted. I have aimed for modest successes to avoid a cornprehensive failure.

Still, despite our disappointments in this sector, I am pleased to report certain healthy signs in the economy. Recession bottomed out in late 1986. GNP posted a modest growth at 1. 5 percent; significant nonetheless because of the previous two years’ negative performance. Exports posted a volume growth of 21.7 percent and provided the much needed boost. To be candid, as we must always be, fortuity can account for these improvements as much as the reform measures we had taken. For the low 0.7 percent inflation rate in 1986 was largely a reflection of the drop in oil prices and the prevailing weak demand and purchasing power.

Our reform measures, however, started to pay dividends in the first half of this year. Our estimate of 1st Quarter GNP is 5.5 percent. Unemployment declined from 12 percent last year to 11.2 percent. The exchange rate remained relatively stable. And gross international reserves at the Central Bank stood at about $2.4 billion as of end-June 1987, or the equivalent of five months merchandise imports.

What is important is that this time it is not the world market, but a reinvigorated domestic economy that is paving the way to recovery. Investments reversed their contractionary trend of the past three years. The 23 percent growth rate in investments promises a respectable real GNP growth for the rest of the year.

The current budget has a definite bias for health care, education and social services expenditures. Some 6.9 million people received food assistance from the Food and Nutrition Program in 1986. We began to expand the coverage of Medicare. Teachers’ salaries were increased, and a leaner and more relevant curriculum was adopted. Some 5.2 million poor availed of vital services such as self-employment assistance, job placement, and family planning. For 1987, we have made P4.2 billion available for long-term mortgages in support of the national shelter program.

National Defense and Security

The price of security and national honor, no less than liberty is eternal vigilance. And that too has a price. Our country is threatened by totalitarian slavery on the Left and reversion to fascist terror and corruption on the Right. Meanwhile, the bottom is threatened by secession. On the bomb-shattered reviewing stand of our military academy, I vowed to end all threats to our democracy by the end of my term. We shall make good on that pledge. Meanwhile, it should be clear by now that no one in these struggles has had a monopoly of anguish and no one in these debates has had a monopoly of moral insight. It is in that light that we ventured to settle these issues outside the battlefield. For, surely, in the words of an architect of conflict and peace, “a society becomes great not by the victories of its factions over each other but by its reconciliations.” To this end, we shall continue to exhaust measures and avenues that will involve all our people in the task of moral and material reconstruction and national unity.

Still our march towards nationhood must be undeterred and any threat to its progress will be countered with all the resources available to us, wielded with as much passion as self-preservation can muster.

The application of force will be as effective as it is judicious. The operational thrust of our Armed Forces is predicated on deterrence, preemption and destruction. But the question is: Can we execute? If we have come to ask our soldiers to do battle to secure our way of life, then we have an obligation to equip them sufficiently for the fight.

Having exhausted the avenues of negotiation, we have armed them with the right. Now we must complete the complement with the material, organizational and physical wherewithal to accomplish the task.

We have directed our immediate attention towards strengthening the chain-of-command, re-instilling discipline within the rank-and-file, and upgrading morale in the Armed Forces. We have placed renewed emphasis on training – on the physical and mental readiness of the troops. Area Unified Commands have been established to facilitate force augmentation and complementation within and across the major services, particularly in areas where military operations are either imminent or ongoing.

We do, however, have a dire need to improve our intelligence, logistics and communication services. Given our limited resources, we must improve our ratio of patrols to contacts, and our capability to maximize such combat opportunities as present themselves. We therefore need ordnance platforms and air transports for ground support, troop mobility and medevac. We need a truly effective navy to secure our coastlines against fresh infusions of arms to rebel or fascist forces, and to punish any further attacks on our territorial honor and integrity, especially in the South.

Our Armed Forces are asked to do more for less. Defense appropriations are down 1-1/4 percent of GNP from an average of 2 percent prior to 1986. We have been able to afford this reduction because of the moral victory we gained in the February Revolution. Still, our defense expenditures are the lowest in ASEAN, and yet no country’s security is so seriously threatened as ours.

Given the realities of our finances and our priorities, we will continue to press for efficiency in the Armed Forces. But we will need a sober assessment of adequacy.

Some will say that force does not address the roots of insurgency. I will answer: Indeed, for such roots are addressed by measures of economic improvement and equitable distribution. But such measures also need time to bear fruit, time that only feats of arms and negotiating from strength can buy us.

We have chosen to improve upon our capability to effectively manage force not so that we, who desire peace, could wage war, but rather so that those who would war upon us will realize, by the deadliness of our riposte, the virtues of peace.

Thus: “we shall bear arms when the intent of bearing them is just,” and, if necessary, we shall mourn our dead by celebrating the birth of generations whose legacy shall be one nation, free, upright, and prosperous.

I have spoken of our problems and I have sketched our programs, some of which have already borne appreciable results. A more detailed report will be submitted to this Congress. Succeeding messages to Congress will convey the legislative agenda of my Administration particularly the Comprehensive Agrarian Reform Program, whose Congressional complement is eagerly awaited. We have prepared the ground for Congressional action on autonomy in the Cordillera. We are determined to achieve genuine autonomy and thus eliminate completely the issues that divide us from our Muslim brothers in a manner consistent with the honor and integrity of the Republic.

In deference to the Congress, Executive Orders issued last week have one year, 90-day, and 60-day effectivity dates. While we believe these measures merit immediate implementation, Congress may want a second look.

I would also hope that our proposed revisions of the Tariff Code and the rationalization of the Government corporate sector shall be among the Congress’s fIrst concerns, these being two areas that I find require the common counsel of Executive and Legislature.

I have also spoken of our continuing vulnerabilities.

Now let me speak of our strength.

The source of the new vigor and energy in the land is the sense of pride and renewed self-confidence of our people; pride in their unmatched political achievements. And, flowing from that pride, the renewed confidence that we can improve things given the will and courage to do what is right.

That pride and that confidence rest however on their continuing faith in the one solid and undeniable achievement of the great moral exertion of our people: the establishment of a democratic Government under an honest and dedicated leadership. In short, it rests on their continuing faith in a Government that will lead them to permanent peace, freedom and progress.

All the assaults on our Government have fallen flat and harmless because the people believe in our Government, in its honesty and sincere desire to work for the common good.

When this session opened, the great powers of the State that were united in my person divided, and a portion has flowed to you. I have felt no loss but rather a great sense of achievement. The great work we set out to do, for which the nation made me its single leader, is completed. We have this day opened the door of Asian democracy’s most famous home: the Congress of the Republic of the Philippines.

With the portion of power that has gone to you goes the shared responsibility to maintain the people’s faith in Government.

While I held total power in my hands, and even after I had scattered the enemies of democracy, I kept ever in mind that power and glory are fleeting. That, in times to come, in the words of Gandhi, “the people will not judge us by the creed we profess or the label we wear or the slogans we shout but by our work, industry, sacrifice, honesty and purity of character.”

In the great debates that will ring in this chamber, remember also these words of his: “Insist upon truth by loving argument, by the testimony of your own life. Once you are assured of the truth, refuse to recant even to death. “

You are blessed beyond all Congresses of the past or of any other nation. For here, ever to guide you, are the sombre shades of the eternal Senators of our Republic: Jose W. Diokno and Benigno Aquino, Jr.. Even as their memory continues to freshen our sorrow, may their sacrifices ever nourish our idealism and commitment to our people, and remind us of the painful lesson that “a government that is evil has no room for good men and women except in its prisons.”

This day completes the circle of our democratic achievements. Now Philippine democracy rests solidly upon the three pillars of freedom: the President, the Supreme Court and Congress. Mr. Senate President, Mr. Speaker, Members of the Congress, join me now in expressing our congratulations and deepest gratitude to those who have this day by God’s grace given to the nation the fully ripened fruit of freedom: ang ating mga kababayan, ang mamamayang Pilipino.


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Page:Travels to Discover the Source of the Nile - In the Years 1768, 1769, 1770, 1771, 1772, and 1773 volume 2.djvu/237

 affected part, who, with the troops of Begemder and Lasta, attacked the king's household, where he was in person; and, though they behaved with a bravery even to rashness, most of them loft their lives, upon the long pikes of the king's black horse, without ever doing any notable execution, as these horses were too-well trained to be at all moved with their shrieks, when they charged, though their bravery and fidelity merited a better fate.

women are said to be very fruitful. They do not; confine themselves even a day after labour, but wash and return to their work immediately. They plow, sow, and reap. The cattle tread out the corn, but the men are the herdsmen, and take charge of the cattle in the fields.

sexes are something less than the middle size, exceedingly light and agile. Both, but especially the men, plait their hair with the bowels and guts of oxen, which they wear likewise, like belts, twisted round their middle; and these, as they putrify, occasion a terrible stench. Both copiously anoint their heads and bodies with butter, or melted grease, which is continually raining from them, and which indicates that they came from a country hotter than that which they now possess. They greatly resemble the Hottentots in this filthy taste of dress. The rest of their body is naked; a piece of skin only covers them before; and they wear a goat's skin on their shoulders, in shape of a woman's handkerchief, or tippet.

has been said, that no religion was ever discovered among

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Carlos P. Garcia's Fourth State of the Nation Address

Mr. Senate President, Mr. Speaker, Members of the Congress:

It is with deep satisfaction and warranted optimism that I now open the fourth regular session of this Congress. For during the year 1960 Divine Providence has made it possible for us as a nation to attain new summits in our unending Odyssey in the highway of progress and development. Our success has deepened our faith and heightened our hope that the Philippine Republic will live to attain its sublime national Destiny.

As we lurch forward into the future, we derive new strength and fresh inspiration by surveying the horizon we have traversed during the year under review. We see that we have reached new heights of prosperity and development as a result of our momentous decision to enact into legislative mandates the fiscal stabilization measures which we implemented vigorously.

Thus under the stewardship of the Nacionalista administration:

(1)          The Philippines chalked up a new high in dollar reserve standing at $205 million during the last quarter of 1960 after paying our short term foreign obligations in the amount of $84 million.

(2)          Our gross national product has registered a spectacular increase by P600 million in 1960 and stands at an estimated level of P10.8 billion as against P10.2 billion in 1959.

(3)          Our favorable balance of payments which we lost during and after the war, and which we regained only beginning 1959, has continue to rise in 1960 in the amount of around, $30 million, and the reserve, as of December 31, 1960, stands at $192 million as against $162 million in 1959;

(4)          We continue to have a balanced budget and even a surplus in the general funds,

(5)          Our peso both here and abroad is steadily gaining in strength, rising from P4.10 to the dollar in 1959 to P3.20 to the dollar beginning December of 1960;

(6)          Because of the success of the stabilization program which went even beyond our most sanguine expectation to the chagrin and discomfiture of the prophets of doom, we were able to start in April 1960 the Administration’s four-year decontrol program. Even before the year ended, we began the second stage of decontrol and all indications are that we will complete in two years the four-year decontrol program and, God willing, by 1962 our national economy shall be completely free;

(7)          In the moral aspect of our national life, I am happy to report that our campaign against graft and corruption has achieved an unprecedented record. In the year reviewed we had in round figures 22,000 administrative cases and decided 14,000 cases with 9,500 convictions and 4,000 exonerations. The rest are still pending. A total of 740 criminal cases were filed.

In general, it can be said without fear of successful contradiction that the year 1960 has been a year of signal achievements in many fields, specially in economics; it marked perceivable advances in our international prestige, and the sun and stars of our flag are shining brighter.

I. ECONOMIC PROGRESS AND DEVELOPMENT

A. Improvement in the National Economy

The great improvement in our fiscal position is a high point of the year just past. Easily its most encouraging aspect is a budgetary surplus in the general fund.

Customs and internal revenue collection had a combined increase of P151.7 million in the fiscal year ending June 30, 1960. To this increase, Customs contributed P101.9 million and Internal Revenue, P49.8 million.

From July 1 to December 31, 1960, actual collections of the two agencies totaled P676.3 million, representing an increase of P55.8 million over those of the corresponding period last year. This is an indication that collections for the current fiscal year will surpass that of 1960.

These marked increases in revenue collections were achieved as result of a determined campaign against graft and corruption and of reforms in the Bureau of Internal Revenue and in the Bureau of Customs.

Despite an increase of about 13 per cent in our imports as against only a 10 per cent increase in our exports, we continued to improve the favorable balance-of-payments position we achieved in 1959 for the first time in decades. This encouraging trend has in turn raised our international reserve to a new high of $205 million during the last quarter of 1960.

The recovery of the economy has been made possible mainly by the successful implementation of the stabilization program, the principal features of which were the margin fee and budgetary retrenchment measures.

As part of the stabilization program and as a prerequisite to decontrol, we continued the monetary restriction during the early part of 1960 in order to hold down prices and maintain the international reserve.

Since the margin levy, the major measure of the stabilization program, went into effect about the middle of 1959, the external value of the peso has continued to increase. In July and August, 1959, the free market value of our currency was as low as P4.10 to $1.00; as of December 1960 it has improved to P3.20 to $1.00. The drop in 1959 was partly due to the increased demand for foreign exchange born of our efforts to accelerate industrialization. However, the margin levy, associated with a more discriminate foreign exchange allocation and selective credit policies and the exercise of greater fiscal restraints, has brought about a continuing improvement in the external value of the peso.

External confidence in our economy has been so enhanced that foreign banks have gone as far as offering loans for economic development both to our government and to private investors. This puts to shame the self-proclaimed prophets of doom who had greeted our proposed economic stabilization measures with dire predictions of economic disaster.

The success of the stabilization program in solidifying and strengthening our internal and external financial position encouraged the Administration to consider the relaxation of restrictions and controls.

In April of last year, we launched a four-year program of lifting monetary and trade controls aimed at the full restoration of free enterprise eventually. Its first phase called for the creation of a free market for foreign exchange equivalent to approximately one-fourth of all foreign receipts and payments. The results were so encouraging that the second phase was made effective much ahead of schedule, barely six months later. The expanded the free foreign exchange market to approximately one-half. We expect to attain complete decontrol within this year of 1961, thereby completing decontrol in two years instead of four.

As we approach the stage of full decontrol, there is need for reexamining authorized exemptions form the margin levy, which will ultimately result in a unified equilibrium of exchange rate.

Full decontrol may obviously be accompanied by an increase in price of imports, but it will create conditions favorable for the establishment of new industries to increase production for export and employment and, in the long run, stabilize prices. With the savings of foreign exchange resulting from the reduction of imports of consumer goods, we shall have more resources available for the importation of machineries and equipment to expand industrial production.

Complementary to decontrol is credit relaxation. Among other measures, rediscount rates and the bank reserve requirements have been reduced and cash deposit requirement for letters of credit for imports has been abolished. The overall result has been a substantial increase in credit available to the business sector.

Outstanding loans for commercial and savings banks rose from P1.96 billion at the end of 1959 to P2.07 billion at the end of September 1960, or an increase of P110 million in nine months.

There are also continuing increases in agricultural and industrial production, electric power output, transportation and, accordingly, employment and earnings. Agricultural crop yield in 1960 rose by 3 per cent over the preceding year’s level.

The industrial program gained further headway as manufacturing production reached new peaks of output in 1960. It expanded another 8.3 per cent, surpassing the previous year’s gain of 7.8 per cent. Electric power output rose by 80 per cent during the first nine months of 1960 over that of the corresponding period of 1959.

As a result of the expanded industrial and agricultural production the gross national product increased from P10.2 billion in 1959 to an estimated P10.8 billion in 1960 or a rise of P600 million. This represents a six per cent increase over the rate of increase of the gross national product in 1959 over that of 1958.

Accordingly, there has been a continuing growth in employment. When I took over in 1957 the employed labor force was estimated by the Bureau of Census and Statistics at 8,149,000. In 1959 the employment figure rose to 8,959,000 or an increase of 810 laborers. The increased economic activities in 1960 as evidenced by the marked improvement in the gross national product indicates an even higher level of employment in 1960.

B. Agricultural Development

The economic stability that we have achieved is due no less to our economic development policy.

In the agricultural sector, we have pursued the highest priority national objective of self-sufficiency in rice and corn. For this purpose, we have maintained he annual appropriation of P20 million.

Emphasis is being given to abaca and coconut, two of our major export products. To rehabilitate the abaca industry, we are inaugurating a balanced program aimed-at restoring our abaca production to its prewar level of one million bales a year. I urge the appropriation of P20 million for this purpose.

In a effort to discover the means of eradicating cadang-cadang which seriously threatens he coconut industry, research is being intensified by all agencies concerned. For the general development of the industry, I am directing the release of P10 million out of the appropriation of P30 million which has already been provided for the purpose.

It is time that we step up the development of the livestock industry through the enactment of appropriate legislation. At present our meat and milk production meets only 15 per cent of the national requirement. We have to import P48 million worth of meat, milk and dairy products each year. The need for assuring an adequate supply of these vital food product calls for serious efforts to develop the livestock industry.

There is need for stepping up the pace towards increasing fish production from the deep seas. The Philippines tuna resources are among the richest in the world. Let us exploit them.

I recommend the establishment of a Deep-Sea Fishing Administration for the purpose of encouraging, coordinating and assisting the development by the private sector of deep-sea fishing. Accordingly, the Development Bank of the Philippines should set aside no less than P10 million a year for this purpose.

While it is wise to encourage the utilization of our forest resources, we have it necessary to look into their conservation and effective exploitation. Scientific management of commercial forest areas through selective logging has been intensified. For a better implementation of our program of planting trees on denuded watersheds, grasslands and marginal lands, the Reforestation Administration has been established.

To give more force to the laws against illegal deforestation, I urge the amendment of Section 267 of the National Internal Revenue Code so that logs illegally cut shall be subject to confiscation even after the payment of fines.

I desire to place squarely before this Congress the matter of reconciling our policies in the interest of the development not only of the Virginia tobacco but also of the native tobacco industry. The United States is now disposed to welcome the entry of cigars and other tobacco products from the Philippines as a result of her cutting economic ties with Cuba. However, let us not forget that under the prohibitions of Republic Act No. 1194, we do not welcome American tobacco here, and we can hardly expect the United States to be hospitable to our tobacco.

The opportunity of gaining a permanent foothold in the American market for the Philippine cigar industry has presented itself as a result of recent developments and we must seize its opportunity now or we lose it forever.

It would therefore be to the interest of the Philippine tobacco industry that Congress reexamine the commercial restrictions in Republic Act No. 1194 without, however, unduly prejudicing the local Virginia tobacco industry with a view to establishing on a mutually profitable and reciprocal basis the Philippine-American tobacco trade.

In connection with cigar manufacture, it may be necessary that government policy should encourage mechanization of cigar making if we hope to fill our cigar quota in the American market to the tune of 180 million cigars of which we have only filled the meager amount of six million cigars.

C. Industrial Development

Even more significant and decisive strides have been made in the field of industrial development.

In food processing, two wheat flour mills and three milk canning plants are now in operation. Three additional flour mills will start this year. The goal for the production of cotton textiles is 300 million yards a year. Spinning and weaving capacity is being rapidly expanded towards this end. The ramie textile mills in Davao will soon be in operation.

To step up the supply of building materials, five new cement factories have been approved during the last two years. Already cement prices have gone down. Now the cementing of all our highways will be made feasible. Soon we may export this product.

Centrifugal sugar production is also expected to increase with the additional sugar quota for the Philippines to the tune of half million (500,000) tons. In this connection, I am glad to announce that necessary credit facilities have been extended by the Philippine National Bank with the support of the Central Bank and the Development of the Philippines to permit the ready expansion in sugar production and take advantage of the opportunity of increasing the country’s foreign exchange earnings in the amount of about $60 million. All in all, the total amount of sugar we have to export to the United States this year is 1.4 million tons. We have to produce this or lose the additional quota.

We are also aiming at self-sufficiency in the production of pulp and paper. We have now an aggregate annual capacity of 95,200 tons of paper and 9,500 tons of pulp. The additional pulp and paper mills will raise production to the level of national requirement. Our other important objective is to produce newsprint paper.

We are also stepping up production of acetic acid, soda ash and caustic soda. We have established a sheet glass factory and three glass container factories.

Fuel production registered a substantial expansion. The most notable development in this field is the construction of three new petroleum refineries in addition to one already in operation.

This administration is determined to realize its major project of establishing integrated steel plants. It has encouraged and supported the participation of the private sector in this industry. The private segment of our economy has made initial investment towards owning 49% of the capitalization. Private participation in the Iligan project calls for appropriate amendments of the charter of the National Shipyards and Steel Corporation which I strongly recommend.

To provide greater stimulus for the industrial development program, it is essential that appropriate business incentives he provided for. Fiscal measures are necessary to reduce the initial burden incident to the establishment of new enterprise.

The establishment of basic industries requires large capital investments. To lighten the initial burden, I recommend legislation granting basic industries full exemption from duties and taxes on their initial fixed capital requirements.

To improve the position of Filipino firms and corporations resulting from certain weaknesses in their capital structure and to provide incentives to all investors, other assistance measures should be approved by Congress.

On the other hand, there are certain industries which have been granted incentives under the Barter Law. Prior to decontrol, products of these industries could not be exported for dollars profitably. With the present rate of exchange under the second phase of decontrol, the need for such an arrangement no longer exists. I therefore, recommend the repeal of the Barter Law.

With regard to the restrictive provisions of the mining petroleum and corporation laws which deter the full development of our mining industries, I urge that measures be considered to relax them.

To undertake effectively the development program, we must expand and modernize transportation, communications, power and irrigation systems.

To expand our overseas shipping facilities the National Development Company procured 12 ocean-going vessels, nine of which have been delivered. Two interisland vessels have been constructed by the National Shipyards and Steel Corporation. We are modernizing the Government Telephone System on a national scale. We have acquired the right-of-way for the extension of the Manila Railroad lines to Cagayan and Sorsogon and it is expected that construction work will begin before June 30 this year.

The age of cement roads has come to the Philippines. It is high time that the main highways traversing the various agricultural and industrial areas (about 15,000 km. long) be paved with cement o reduce the cost of maintenance. The use of cement instead of asphalt in the construction of our roads will be far more economical in the long run. Local cement production will soon be expanded so as to bring down the price thereof and enable the government to undertake this ambitious project. I urge that Congress consider the adoption of a program cementing our national highways. To finance the initial phase of this project, I recommend the appropriation for the next fiscal year of the amount of P35 million. This will enable us this year to pave with cement at least 350 kilometers of our national highways to be apportioned in the following manner: 150 kilometers for Luzon, 100 kilometers for Visayas and 100 kilometers for Mindanao. This apportionment is in line with the industrial dispersal policy of this Administration.

In this connection, offers of private corporation or contractors to build for the government portions of the cement road system, under special terms or deferred payment plan, should be welcomed and accommodated.

Industrial power output has been increased by 265,000 kilowatts due mainly to the operation of the Binga Hydro electric project. Studies for four other hydroelectric projects with a total capacity of 359,000 kilowatts have been completed.

The bulk of the credit facilities and dollar allocations has been extended to industries in Manila and suburbs. I have directed a study on the dispersal of the industries supported by basic facilities. Our policy in this connection is to give priority to the area with the greatest potential. Priority should be given to the systematic development of Mindanao because of its tremendous natural resources and because it is the least developed among the three groups.

The financial resources required for economic development at the rate necessary to sustain a continuing growth will call for the tapping of idle savings and channeling them to productive investments. Towards this end, public policies should learn from the experience of more advanced countries by encouraging the establishment of investment houses quite distinct from the mutual funds. This will further strengthen the financial basis of the economy and assure sources of long-term funds for desirable productive ventures.

D. Economic Nationalism and Trade

Even as we are making provisions for expanding production, we have attended to increasing outlets for our output. We have promoted foreign trade both to expand the demand for our traditional exports and create foreign markets for new products.

In implementing the Retail Trade Nationalization Act, the Department of Commerce and Industry registered and assisted a great number of new Filipino retailers. This Congress also passed during the last session the Rice and Corn Trade Nationalization Law.

The role of non-agricultural cooperatives in the economy has gained added strength with the establishment of the Philippine National Cooperative Bank.

At present, there are a number of agencies with which businessmen have to deal in setting up an enterprise. In order to serve their needs, especially those of foreign investors, a law should be enacted centralizing these functions under one office.

I also recommend to revision of the General Banking Act to delimit the share of foreigners in jointly owned banks.

I propose the amendment of Republic Act No 1130 to abolish the Anti-Dummy Board and to transfer its function to the Department of Justice.

Without detracting from the policy to strengthen the position of Filipinos in economic activities, I consider it essential for the purpose of pushing the economy into a self sustaining momentum that we attract foreign capital to a greater measure than it has flowed into the country.

However, to attract foreign investment, it is necessary to provide for it a favorable climate, including the protection of foreign investors against non-business risks and assurance of an equitable treatment.

This year, as already announced, is “See the Philippines Visit the Orient Year.” For the convenience of tourists, our national airport is being modernized to make it suitable for jet travel. With this we expect to attract more tourists. But we must spend for the establishment of necessary tourist attractions and facilities. Our national trait of hospitality to our foreign visitors should be made manifest in and through Customs, immigration Office, Visa Office, hotels, taxis, trains, and other transportation media, and by the people themselves. We are determined to make our income from tourism among the biggest items contributing to our dollar reserve.

II. EDUCATION, SOCIAL WELFARE AND COMMUNITY DEVELOPMENT

A. Problems in Education

I consider it urgent that we take a closer look at the financial shortcomings of our public school system.

In line with my previous recommendation to reexamine the present method of financing our primary and secondary schools, propose the enactment of the Stabilization of School Financing Bill.

This bill provides for a partnership plan among the national, provincial, municipal and city governments in the financing of public primary and secondary education. Obviously, the additional financing responsibilities that shall be borne by the local governments would call for permissive legislation authorizing provincial and municipal governments to adopt measures to provide funds for adequate school maintenance.

To correct the acute shortage of textbooks we initiated a textbook printing project to print 35 million textbooks at a cost of P47 million, plus $5.9 million as counterpart.

Private schools continue to play an important role in education. They accommodate 60 per cent of the secondary students and 90 per cent of those on the college and graduate levels. To the end that the highest standards of instruction possible may be maintained, an increase in the supervisory personnel is necessary. Supervision over private educational institutions in secondary and collegiate levels may be participated in by a Committee or Board elected by such private institutions. I urge legislative consideration of the idea to grant qualified private educational institutions a margin of curricular freedom to allow educational diversity in educational unity.

The University of the Philippines has maintained its traditional role of setting national standards for scholarship and research. More liberal financial support would enable it to intensify and expand its program of graduate studies and research and, what is more important, to enable it to embark on extension work of participating actively in community development.

B. Science and Technology

We have intensified the national effort to improve the foundation of our scientific progress and we have encouraged science consciousness. We have maintained the science scholarship program. Arrangements are being made to establish a science high school in Manila. The U.P. College of Agriculture is gradually being recognized as the training institution for Asia in agricultural science. The establishment in Los Baños of the International Rice Research Institute will make the Philippines the center of scientific efforts to improve he industry that produces all of Asia’s staple food.

With the establishment of the Philippine Atomic Research Center, the production of isotopes for uses in agriculture, industry and medicine is not far off.

In connection with the installation of the reactor in the Philippine Atomic Research Center, I recommend the passage of the Indemnity Bill which was introduced in last year’s session of Congress.

To stabilize the national research program, I also urge Congress to consider the utilization of a portion of the proceeds from the foreign exchange levy to assure continuous financing of important research projects.

C. Social Welfare

The Administration has given relief to and alleviated the plight of about 900,000 victims

of disaster and calamities. We also met the problems of juvenile delinquency, the physically handicapped, the infirm and the aged, the squatters and beggars. Some 40,000 individuals were helped to find new homes in more suitable surrounding or sent back to the provinces or to NARRA settlements. Additional efforts to relocate squatters are in progress. The Philippine Charity Sweepstakes has raised great amounts of funds for social welfare activities. The broadening of the scope of its benefits should be considered by Congress.

D. Social Security

Today, almost four million people are enjoying the protection and benefits of the Social Security System for the private sector and the Government Service Insurance System for the government sector. These two systems also assist our economic development since a large portion of their resources is being channeled to productive investments in various sectors of our economy.

Agricultural workers are now covered under the Social Security System. They have a right to benefit from the enlightened and altruistic provisions of the Social Security Act.

E. Housing

The problem of providing low-cost housing for our wage-earners, particularly in urban areas, continues to be a major concern of this Administration. The Home Financing Commission, the People’s Homesite and Housing Corporation and the National Urban Planning Commission should coordinate their efforts behind a bold long-range housing program for the masses. We must encourage the participation of private enterprise in this essential program. The Social Security System should embark on a low cost housing project for the benefit of its members.

F. Labor

This Administration has maintained its deep concern for labor’s rights. During the last three years about P11 million were paid to aggrieved workers and employees.

With the establishment of four additional regional offices and the organization of the Women and Minors Bureau within the current fiscal year as already authorized by Congress, our Workmen’s welfare will be further promoted.

The Apprenticeship Division has lately been expanded into a full-fledged office, indicating the importance this Administration gives to skills development. In view of the fact that Asian Economic Development Fund support for the project will cease this year, I urge the appropriation of an adequate sum to continue the operation of the Labor Market Information and Statistics Service Project.

In 1960, 283 new unions were organized and registered and 193 collective bargaining agreements were recorded. The fact that there were only 44 strikes in 1960 as against 59 strikes as the annual average during the preceding three years is an eloquent evidence of the growing contentment in the labor ranks, and of better relationship and understanding between management and labor. With the increasing acceptance by employers of the institution of collective bargaining, industrial peace has been greatly enhanced.

Significantly, through the favorable policies of the present administration, economic activities since 1953 have been so expanded as to accommodate an additional 2.2 million workers, thereby reducing unemployment from 1.4 million or 17 per cent of the labor force in 1953 to only 750,000 or 7.7 per cent of the labor force in 1959.

G. Health

Public health and sanitation services were further extended to the rural areas. Most of the diseases which have been the common causes of death are under control. Marked decrease was noted in the death rate as well as in the infant morality rate.

Hospital services have been improved. Rural health units have continued to minister to the needs of the masses. The Government has upgraded the standards of services.

More and more funds are needed in order to fully provide in the rural areas medical service and health facilities.

H. Rural Reconstruction and Community Development

This Administration has from the start considered our rural inhabitants a special focus of our ameliorative efforts. Accordingly, we have taken every possible step to increase the rate if development in the rural areas.

We have revitalized the agencies dealing with rural credit and cooperative marketing. The operations of the rural banks have been expanded. We have devoted a substantial part of the resources of the Philippine National Bank and the Development Bank of the Philippines to affording credit on reasonable terms to small farmers. The latter has set aside P50 million for small loans. Rural banks have increased to 150 at the end of 1960. We accelerated the grants of land patents and homesteads and the resettlement efforts of the National Resettlement and Rehabilitation Administration. An international Rural Reconstruction Institute to be established in Cavite is designed to be the training center of future rural reconstruction leaders from Asia and Latin America. It is bound to have far-reaching effects on our rural reconstruction and community development.

The establishment last year of the Agricultural Credit and Cooperative Institute at Los Baños is another milestone inn our efforts to revitalize and improve the management of credit and cooperative organizations serving the rural areas.

The Office of the Presidential Assistant on Community Development (PACD) is proving to be an effective instrumentality in the promotion of the welfare of the rural masses. In the short span of four years, the PACD has become a vital factor in the economic, social and cultural progress of our country by reawakening in our people on rural areas their capacity for self-help and an awareness of their ability to recognize their own problems and adopt measures for their solution.

Where once existed barrios wrapped in apathy and a sense of hopelessness, there now thrive invigorated communities inspired by democratic grassroots leadership—a strong guarantee against the inroads of Communism.

From an initial coverage of 22 provinces in 1956, the community development movement now covers 55 provinces. Self-help projects undertaken by the people in the past four years number 29,886 valued at P29 million. These projects included food production, varied barrio improvements, feeder, roads, barrio waterworks and spring development, repair of schools, communal irrigation, promotion of public health, and related improvements.

I urge that we give permanence to the community development program by giving the PACD the necessary power and appropriation to carry on with its task even more effectively.

I. War Veterans Affairs

Our war veterans, war widows and orphans deserved our continuing concern. For the simplification of the administration of veterans’ claim and benefits, we have consolidated all agencies in the Philippine Veterans Administration. It is expected that under the new dispensation the interest of the defenders of our country will be fully attended to including those related to their claims with U.S. government.

J. River Basin Resources and Flood Control

The devastating floods in many areas in 1960 emphasized the need for revising our policies on reforestation and river basin resources development.

Last Year I stressed the importance of development plans to utilize to the maximum the potentials of our river basin resources. This is necessary, whether it be for power generation, for the irrigation of farm lands or for industry and home use, but particularly to arrest the recurrent ravages of floods.

I therefore urge that Congress adopt measures for the reorientation of public works with a view to combining the objectives of flood control, water conservation, industrial power generation into integrated multi-purpose projects.

III. PUBLIC ADMINISTRATION

A. Improved Civil Service Morale

The enforcement of the new Civil Service Law, including fair and necessary salary adjustments, has improved the morale of civil servants and developed a greater sense of responsibility in the public service. The constitutional injunction that appointments in the civil service shall be based on merit has been strengthened.

I reiterate the recommendation in my message of last year that the new Civil Service Act be improved by eliminating certain provisions apparently inconsistent with the Constitution and also other provisions which are vague, uncertain or incompatible with each other.

B. Public Administration Upgraded

Recognizing the need for upgrading the quality of public administration, executive and supervisory development seminars have been conducted. The beneficial effects of these programs have become evident in the increased efficiency of the various arms of the public service. The increasing appreciation for progressive management was climaxed recently by our sponsorship of the first general assembly of the Eastern Regional Organization on Public Administration.

C. Policy on Government Corporations

The government corporations continue to be worthy instruments of the government for industrial pioneering.

In pursuance of the policy of placing in the hands of private enterprise those corporations that have accomplished their pioneering role, I approved the sale of the Naga Cement Plant located in Naga, Cebu. In 1957 we sold the Bacnotan Cement Plant. The sale of the Maria Cristina Fertilizer Plant for P12 million has also been effected. The Cabinet has already approved the sale of the Insular Sugar Refinery at more than P6 million and is considering the liquidation of two textile mills of the National Development Company. The process will continue until ultimately the government is completely out of business.

D. Work of Joint Legislative-Executive Tax Commission

The Joint Legislative-Executive Tax Commission, created to improve our tax system, has already submitted legislative plans which deserve your serious consideration. These proposals meet the need for additional revenue, without increasing the average taxpayers’ burden, and provide impetus for rapid economic development.

I am prepared to endorse any measure aimed at revising the Tariff and Custom Code, in harmony with the condition that obtain under the decontrol program and external trade. I also urge necessary revisions in the National Internal Revenue Code. Among the changes should be a scheme for the automatic retention of the share of the local governments in the national taxes concomitant with the policy of giving them greater economy.

IV. ADMINISTRATION OF JUSTICE

Our courts of justice have maintained in momentum in reducing delay in the disposition of judicial cases. With the increased jurisdiction granted in 1960 to municipal courts in chartered cities and justice of the peace courts, our higher courts have been relieved of the burden of petty litigations.

They were thus able to devote more time and effort to more important cases.

The Court of Industrial Relations and the Court of Agrarian Relations have done commendable work in settling controversies between labor and management, and between landowners and tenants. There is now industrial and agrarian peace. The Court of Tax Appeals has sped up decision on assessments made by the Bureau of Customs and the Bureau of Internal Revenue.

V. NATIONAL DEFENSE

Our Armed Forces continue to play a vital role not only in the preservation of peace and order but also in our socio-economic activities. They helped beyond the call of duty in school building construction, in relief work during times of public calamities, even in land resettlement and rural development.

There has been a marked decrease in the personnel strength of the Armed Forces since 1953 without impairing its capability to maintain peace and order, carry on with military training and fulfill our international commitments. It is our constant endeavor to keep our National Defense organization abreast with the latest advances. Under the Mutual Defense Pat with the United States we are modernizing our armed forces particularlt in relation to the new weapons and methods of warfare.

VI. FOREIGN RELATIONS

Because of our independent foreign policy, we have gained new prestige in our own region of the world and in the international community. We are truly forging the true image of the Filipino nation. With rational firmness, we have accomplished much without painful disruptions or violent difficulties which normally follow the process.

The bonds of friendship and mutual interest which link the Philippines and the United States, our closet ally and friend, remain firm and enduring. This was remarkably dramatized by the visit here of President Eisenhower last year. On the questions of disarmament, cessation of nuclear tests, the peaceful uses of atomic energy, mutual security, regional defense and respect for the dignity of the human person, the Philippines stands with the free peoples of the world in unity of purpose.

But relations, however, cordial, cannot be entirely free from difficulties. It is to the credit of the Philippines and America, for instance, that wherever such difficulties have arisen, sincere efforts have been exerted to overcome them with fairness and justice.

It is in this spirit that I am happy to report to you that, in addition to the major agreements reached last year in the negotiations conducted between our Secretary of Foreign Affairs and the Ambassador of the United States, considerable progress has been achieved more recently on the highly sensitive question of criminal jurisdiction in relation to U.S. bases in the Philippines. I am confident that the remaining unsettled questions in the revision of the Military Bases Agreement will be resolved to the satisfaction of both parties during the war.

Progress has also been made in the current negotiation for the adjustment of the principal obligation and interest under the Romulo-Snyder Agreement. You are aware of the two separate bills under consideration in the Senate and House of Representatives of the United States Congress for the payment of the balance of our war damage claims. The hope that the United States Congress will finally act on those pending measures is quite bright. Furthermore, we will exert our utmost in the American Congress to make permanent the increase of our sugar quota by 500,000 tons now granted us on a temporary basis.

In the World Organization, we continued to support the stabilizing “presence” of the United Nations in troubled spots of the world, such as in Laos and the Congo. We strongly co-sponsored the declaration against the continuance of colonialism in all its form anywhere in the world.

Our policy of closer ties with Asia has also gained fresh momentum. We have accredited a diplomatic mission to Ceylon. We have just authorized a legation in Laos. We concluded with the Government of Indonesia an agreement for joint naval patrol of southern water. We have begun negotiation of a trade agreement with South Korea and will soon meet with Pakistan for the same purpose. We are considering cultural accords with the Republic of China, Pakistan and the United Arab Republic. We have entered into an agreement for the mutual abolition of visa fees with South Korea and Israel. We are also at the stage of concluding a postal agreement with Japan.

At the gracious invitation of President Chiang kai Shek, I paid a most fruitful and rewarding visit to Taiwan during which we renewed the cordial ties that bind our two countries. I shall visit the Federation of Malaya next month.

Our panel of negotiations has also just signed the Treaty of Amity, Commerce and Navigation with their Japanese counterparts. Considering the importance of the Treaty and its effect upon the general economy of our nation, it is my desire that the Treaty be subjected to a thorough scrutiny and exhaustive consideration by as many conceivable segments of our population as possible before it goes through the constitutional process for ratification. I express the fervent hope that the discussion of the Treaty shall be dispassionate and objective with an eye single to the best interest of the nation.

Recent developments and the perceivable trend of possibilities indicate that the problem which Communist China poses to the security of our area might assume a new proportion. It will do us well to asses carefully those possibilities with a view to determining their impact upon our policy towards Communist China and what measures we could devise alone or in cooperation with the free peoples or our region to meet the developing situation.

VII. REPARATIONS

In the matter of procurement and disposition of reparations goods and services from Japan our country, as of November 30, 1960, has received a total of P198.3 million in machineries and equipment for public works, capital goods for government agencies and private entities, and services in the salvage of sunken vessels that clog our sea lanes.

The value of goods and services already contracted by our government, however, is P246 million and the Japanese Government has already paid to Japanese supplies the sum of P227.9 million. Therefore, based on the P225 million due from the Japanese Government during the first four and a half years of the Agreement, Japan has fully met her commitments to the Philippines.

The annual schedule of payments and allocations to the public and private sector is with a view of utilizing reparations payments in such a manner as shall assure the maximum benefits in an equitable and widespread a manner as possible. We set aside P5 million o develop the potential cottage and home industries and thereby provide more employment opportunities for the masses. This policy will be implemented annually as long as necessary. Furthermore, we are now seeing to it that only industrial projects which satisfy a system of industrial priorities should be allowed for procurement.

Effort is being exerted to make full use of the P250 million investment loan by lightening the terms and conditions under which this may be extended.

With a view of obtaining maximum benefits from reparations payments, the Reparations Law should be amended along lines already indicated in my last message.

VIII. YOUTH ORGANIZATION FOR CIVIC SERVICE

The Filipino youth fired with ardent patriotism and raring to do something for their beloved fatherland should be rallied and organized for civic service. They can be immense help in solving the worsening youth delinquency problem. They are a definite asset in fighting Communism. They can be massive assistance, as once in the past, in keeping elections free, honest, and orderly. They can contributed effectively in our efforts for reforestation and against deforestation and also in the conservation of other natural resources. They can wield a tremendous influence for good in moral regeneration and in many other undertakings requiring mass action.

It is therefore recommended that legislation in this direction backed up by adequate financing be adopted.

IX. DRIVE AGAINST GRAFT AND CORRUPTION

At any start of my Administration and again in my 1960 message on the State of the Nation, I pledged total war against graft and corruption in the public service although it is a matter of history that this problem was inherited from a previous regime. I mean to keep my pledge no matter at what cost. The campaign gained added vigor with the implementation of the Anti-Graft and Corrupt Practices Act. The Presidential Anti-Graft Committee has since been probing cases of unexplained wealth.

Various executive departments have initiated administrative cases numbering 21,992; 13,600 cases were decided with 9,547convictions and 4,110 exonerations. Some 8335 case are pending decision. Criminal cases totaling 740 were filed. I can state with pride and certainty that this record is unprecedented in the annals of all previous administrations. Contrary to gratuitous allegations, I can say, and he record will bear me out, that we have taken action against all accused malefactors in the public service irrespective of whether they are “big fishes or small fries.” I wish to reiterate anew that we cannot move in the dark. We can proceed only against those cases brought to light by civic-minded citizens and supported by evidence. We cannot act on the basis of generalities or on gossips peddled by “ugly wagging tongues.”

I have urged all sectors of the Government as well as the public in general to help in the campaign by supplying us facts and proofs. Graft and corruption is a social problem which cannot be eradicated by mere lip service or mere wishful thinking or condemnatory language in some “corners.”

In this connection the teaching of moral values should be further strengthened through the intensification of Character Education as a separate subject in the curricula of all public and private schools. I consider this emphasis of great value in our campaign against graft and corruption since it will imbue our school children with the concepts of honesty and righteousness at a time when their minds are still impressionable.

Let it sink into the conscience of society that it takes at least two or commit graft and corruption. The bribe giver is as guilty, if not more so, than the bribe taker. It is unfortunate, however that society only condemns the briber taker and even idolizes the wealthy tempter. It is another ironic misfortune that the administration which does the dirty job of flushing out, identifying, exposing and punishing without fear or favor corruption in government, gets as its reward the reputation of being corrupt. If society does not correct this twisted attitude, the day will come when this social cancer will spread deep into the system of our body politics without any doctor that will have the courage to prescribe the remedy and lead the nation to salvation.

I therefore call upon the press, the radio and television to focus their floodlights upon the men who committed the corrupt act and not upon the administration that caught and punished the act. Let us not hide the identity of the corrupt behind generalities. Let us demand that the corrupt men answer for their criminal acts instead of pinning responsibility on President under that novel political heresy of “command responsibility.”

RECOMMENDATIONS

Ladies and Gentlemen of the Congress, I have formulated for your consideration eighteen (18) important recommendations in the course of this message. But before I conclude permit me to tax your indulgence by proposing other recommendations of no less importance and urgency in abbreviated form as follows:

(1)          On the broad front of basic governmental reforms. I reiterate all the recommendations I have made for appropriate all amendments to the Constitution in my last message.

(2)          To accelerate our industrialization and the utilization of our vast natural resources, I recommend amendments to the petroleum, mining and corporation acts to make them conform with modern advances, problems and trends in leading mining countries;

(3)          I recommend amendment of the tax exemption law to exempt specified basic industries from the payment of duties and taxes fixed capital requirement;

(4)          I ask you to study the proper utilization of the proceeds from the margin levy to encourage maximum development of priority industries and push through more vigorously important public works to high economic value;

(5)          The NASSCO charter has to be amended to permit the participation of the private sector in the corporation’s integrated steel project;

(6)          We must extend tariff protection to infant agricultural industries, such as coffee, cacao, citrus, peanuts, and others.

(7)          For improved fiscal administration, I recommend the following measures:

(a)           Suspension of the tax on capital gains provided such gains are plowed back to investment in industry;

(b)          Extension of a preferential rate of income taxes to dividend earned on shares of stock;

(c)            Provision be made for carry-over losses;

(d)          Further modernization of the tax system by doing away with regressive taxes and by devising a more equitable distribution of the tax burden based on capacity to pay;

(e)           Change the allotment base on internal revenue taxes and to effect the automatic retention of shares of local governments. And

(f)           Adoption of a uniform and at the same time flexible and updatable real property assessment system.

In this connection I want to interject the observation that land values in and around industrial centers have increased even fifty times as high as, say, a decade ago, and yet their assessment values have remained stationary. Another observation is that when the government buys a real property for some public use, it pays a price ten or twenty times more than the assessed value. There should be a limit of the proportion between the assessed value and the expropriation value so that land assessment should not be brought down too low.

(8)          Congressional appropriation of funds to complete the Rizal Centennial Shrine. Unhappy, private contributions for the purpose have run short of the total requirement, and we certainly owe it to the memory of our national hero to come to the rescue of this project and see it through to completion this year.

CONCLUSION

Gentlemen, in my humble way I have outline the legislative task of the year. I have set he goals we should attain, and I have profound faith that we shall attain them with the united determination of Congress. But man is finite and God is infinite and eternal and so we need Him in all our national efforts. Let us therefore pray for His guidance and mercy and that He abide with us forever and fill our days with the abundance of His blessings.

“For His Kingdom is a Kingdom of all ages, and dominion endureth throughout all generations. They shall publish the memory of the abundance of His sweetness and shall rejoice in His Justice.” (Psalm 144)

With Him nothing is impossible; without Him nothing. I thank you.