On high prices

Excer[ts from:

ON THE STANDARD ISSUES OF THE DAY
(Speech delivered by Jose Maria Sison at Siliman University, Dumaguete City, on March 9, 1967; sponsored by the Beta Sigma Fraternity.)

High Prices

Let us take the issue and problem of high prices. The subject cannot be seriously discussed without considering the colonial and agrarian character of our economy and its subordination to U.S. imperialism. The current rise in prices can only be understood within this context.

It is certainly dishonest for our colonial-minded leaders not to acknowledge the disastrous results of the full and sudden decontrol of 1962. Decontrol doubled the peso equivalent of the dollar in the open market, thus automatically depressing the value of the peso. This is one imperialist debauchery of our economy.

Our national industrialists now have to pay more for imported capital goods, fuel, raw materials and spare parts replacements. With the resulting increase of the cost of production, some firms have been so hard hit that they have had to fold up while others have had to raise their prices in order to survive. In the course of the weakening of the peso, Filipino firms have been easily taken over by foreign firms. Otherwise, they are simply crushed by the foreign monopolies.

With the increase of the prices of the commodities that they buy and the resulting depression of their real wages, the workers have to demand an adjustment of their money wages. The hiking of the wage level in turn increases the costs of production and, the vicious cycle of capitalism, the capitalist must pass on the cost increment to the mass of consumers, leaving the workers with the same or even much lower real wages. The problem of high prices assails the vast majority of our people who have a low fluctuating income or a low fixed income.

Inflation in the Philippines has resulted from the consistent breakdown of local production in both national industry and agriculture. This in reality does not conform with the Keynesian notion that higher prices reflect higher production. This is the irony of a neocolony that must perforce be subject to developments in the imperialist metropolis.

In agriculture, the glaring irony has occurred. We are an agricultural country and yet we cannot produce sufficient food for our people. The Laurel-Langley Agreement has perpetuated the colonial character of the economy by the terms of preferential trade which favor a raw-material export and a finished-product import trade relations. This is because our landlords have been carried away by the attractive price of sugar extended by the United States and they have turned from production of staples to sugar production. Within the domestic market, even the price of sugar has risen for local consumers because the bulk of it has been exported without consideration of local needs.

Our government is so servile to U.S. imperialism that it has allowed U.S. agro-corporations to take over thousands of hectares of good agricultural lands in Cotabato and elsewhere for the production of pineapple, banana, and other fruits. This has also resulted in the decrease of ricelands in the second most important rice-growing area in the country.

In the U.S. an inflation is going on as a result of massive military spending in the Vietnam war and other forms of deficit spending by the U.S. government. And because we depend so much on manufactures from the U.S., due to lack of industries in our own country, we automatically import the inflation from the U.S. We have to pay more for U.S. goods. The reactionary government also has to get U.S. loans at more onerous terms only to cover artificially the chronic deficit in the colonial exchange of Philippine raw materials and U.S. finished manufactures.

The Vietnam war has caused the upward spiral of prices in the United States. Men are drafted for the non-productive work of fighting a war and receiving pay for it. Basic materials are being diverted from consumer goods production to the production of war materials like bombs, chemicals, military vehicles, construction materials, fuel and the like. These materials have become more expensive because of the high demand from the war industry. Thus, commodities from the United States have become expensive in the Philippines.

We observe that in the Philippines itself, as in many other client-states of the United States, men and materials are being stimulated by higher prices towards the Vietnam war. To cite an instance, if Philippine cement is massively exported to Vietnam, the cost of constructing houses here would rise; the rent for apartment houses would also rise as it is rising now. Also, the expenditure of P35 million and more for the Philippine puppet expeditionary force to Vietnam because of subservience to U.S. policies weakens the internal capacity of the reactionary government to look after the welfare and security of our people.

We can very well see that U.S. imperialist policies are basically responsible for the specific problem of higher prices.

Turning to the basic problem of feudalism, its perpetuation means the continued depression of the purchasing power of the peasant masses. Because of class oppression and backward methods, Philippine agriculture is not providing adequate food for the people. Because of imperialism, Philippine agriculture is not providing raw materials for local industries. Landlords constantly engage in luxury spending and this also tends to jack up prices. The whole feudal problem is sustained by imperialist domination.

The need to vigorously pursue national industrialization in order to provide jobs to the masses of our people is urgent.

By it, we shall provide jobs for our people and they shall be afforded the chance to buy the products of their own labor. In the long run, the unrestricted industrial development of our economy will reduce the prices of commodities. If basic land reform is used to support national industrialization, our peasant masses reaching 70 per cent of our population will be able to buy the products of our industries with their increased purchasing power. Our peasant masses would be providing adequate food and raw materials that serve as the basis for national industrialization.

National industrialization and basic land reform are the main economic demands of the national democratic movement.

Only the public sector backed up and determined by the organized workers, peasants, students and other patriotic segments of our population can lead in the achievement of national industrialization and land reform. We cannot depend on foreign investors for these; it is futile to do so as our experience in the last six decades tells us - four decades under direct imperialist rule and two decades under indirect imperialist rule. A small amount of capital is invested in quick profit areas by U.S. firms, oftentimes from our own credit facilities, and in a period of even as short as one year, super-profits squeezed from Filipino labor and from the mass of consumers are already flowing out of the country. U.S. investments always carry with them the curse of super-profit remittances which have plagued and restricted the growth of the Philippine economy. Consider the huge amount of capital that the oil firms, Caltex and Esso, are taking out of the country; consider the danger of placing
control of such a vital commodity as oil in the hands of foreigners. By this commodity alone, the U.S. controls the motion and prices of all goods in this country.
 

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