PHILIPPINES’ ‘BARE CUPBOARD’ PLAYING INTO REDS’ HANDS

Gisborne Herald, Volume LXXVII, Issue 23271, 5 June 1950, Page 5

PHILIPPINES’ ‘BARE CUPBOARD’ PLAYING INTO REDS’ HANDS

(11.30 a.m.) NEW YORK, June 4. The financial position of the Philippines Government was regarded in Manila as the most serious aspect of the country’s situation, overshadowing even the Communist Hukbalahap menace, said the New York Times correspondent in Manila today. He said that observers felt that a stable, reasonably well-administered Philippines Government would almost certainly be able to suppress internal subversion. As things were, however, the shortage of foreign exchange and a big budgetary deficit threatened to produce an economic crisis. The consequent suffering and unrest might be more than President Quirino could handle.

President Quirino already was unpopular and had been charged with corruption and mismanagement. The Government had not yet made it clear how it planned to finance its deficit. It was considering new taxes, but even these could cover only part of the deficit. The Government already had borrowed the legal limit from the Central Bank, drawn heavily from the Govern-ment-owned Philippines National Bank, and dipped into the sinking and trust funds.

“By this time the cupboard is pretty bare,” the correspondent said. “The alarming possibility is that the Government will resort to the printing press despite the stern opposition of the Central Bank Governor, Signor Miguel Cuaderno.”

The correspondent said the United States was reducing its aid to the Philippines, and Philippine citizens would have to cut out many commodities to which they had become accustomed. There was a danger that economic malaise —high prices, low salaries, unemployment and possibly skipped payrolls—would breed discontent that would play into the hands of the Communists.