Book 23: Pretty Ugly

Written for Larry Henares’ book, “Suns and Stars Alight”
By Honorable Juan L. Manuel

Secretary of the Department of Education
Republic of the Philippines

1976, before the betrayal of Marcos, Virata, Fernandez, Jimmy Ongpin etc.

            The good old days were economically speaking never that good.  Prewar Philippines, then a colony of the United States was a feudal, agricultural, export-import-oriented backward country, dominated by land-owners and foreign trading corporations.  Even the candies we ate and the soap we used, made out of Philippine sugar and coconut oil, were imported from the United States.

            The Second World War laid waste our country’s meager resources and made us realize the importance of economic self-sufficiency.  At the same time World War II in the United States gave rise to tremendous advances in all areas of human endeavor, particularly in technology, management and economics.

            After the war an economically prostrate Philippines accepted Independence from the United States along with “parity rights”, the right of Americans to enjoy the same rights as Filipinos to operate public utilities and exploit national resources, later to operate “all forms of business activities”.

            The War became a demarcation line between the old generations of Filipinos with a lingering sense of gratitude to Americans, comforted by the pastoral peace of an agricultural economy, and a new generation, heirs to the great advances of the war years, born without an umbilical cord to the colonial past, restless, independent, whose destiny it was to rebuild our nation out of the ashes of World War II.

            Hilarion M. Henares, Jr. was of this new generation, the “New Filipino” as President Marcos was to label them in the 1970’s.

            The Philippines of 1970’s, a modern industrial nation, independent, nationalistic and proud, is the result of the struggles of the 1950’s and 60’s in which Henares and his generation played their part.  Fiercely nationalistic, Henares chose as his field of battle the area of economics.  There are many milestones that marked our way to economic emancipation and Henares was there first.  He was a visionary, a gadfly, and achiever whose writings, speeches, TV programs, actions and actuations prodded this country almost against its will to accept the challenge of change in the postwar years.

Consider these milestones:

  1. The Management Revolution:

In the 1950’s, fresh from the Massachusetts Institute of Technology (MIT), Henares visited one Filipino firm after another, and like Frank Gilbreth before him he proposed:  “Let me handle your firm for a year and I’ll double your profits.  Just give me 10% of the profits over and above twice your profits now.”  He was consultant to 20 large firms, and for the first time, scientific Management in project study, production planning, work simplification, wage classification and financial management was applied in the Philippines.  To train his managers, Henares set up a Graduate School for Management in Feati and Lyceum Universities, also for the first time in the Philippines.  He was Dean of two Colleges at the age 25, and spearheaded Philippine participation in International Management Conferences.

      A decade later, when Scientific Management became a regular course in all universities in the Philippines, culminating in the establishment of the Asian Institute of Management (AIM), one recalls what Lillian Gilbreth said of Henares:  “Henares is the Father of the Management Revolution in the Philippines”.

  1. The Industrial Revolution.

What was the exact turning point at which the Philippine government took a concrete step to revise its economic policy and embark on an all-out industrialization program?  Most economists point to the time, during the era of Import Controls, when the Central Bank decided to reallocate dollar quotas on the basis of “historical pattern of import.”  Before that date, in 1954, traders and agricultural export industries had priority; after that date, industries manufacturing goods for domestic consumption began to intrude on the economic scene.

      It is for record that it was young Henares, then representing his own company and the Philippine Chamber of Industries, who challenged for the first time the “historical pattern import” policy of the Central Bank.  He demanded and got public hearing before the Monetary Board, and after a brutal and often comic confrontation with representatives of 10 American firms, won the day for the cause of Philippine Industrialization.

      Almost single handedly, young Henares lobbied for the passage of Tax Exemption Law for new and necessary industries, and prodded the Tariff Commission to issue, for the first time, tariff amendments to protect local industries.

      Thus did Henares initiate the Industrial Revolution in the Philippines through Foreign Exchange Priority for Industries, Tax Exemption for New Necessary Industries, and Economic Protectionism by Tariff Amendment.

      He practiced what he preached.  The small paint factory he took over from his father became an industrial complex making 56 different products, and made him a millionaire before the age of 30.

  1. The Revival of Nationalism.

It was Senator Claro M. Recto who unfurled the flag of Nationalism in the post-war years but his approach was mostly political, in the field of foreign policy.  Henares was one of his many admirers.  When Recto died, in a cocktail party where drunken Americans toasted the death of the great nationalist, Henares stood up and cried, “Recto alive was vulnerable.  Recto dead is invincible”.

It was Henares who moved the field of battle into the arena of economic policy which became in turn the overriding concern of every government administration.

He took issue with the Americans on foreign investment, industrial development, the Laurel Langley Agreement, the Bell Trade Act, the Asian Common Market, Trade with Socialist countries, and even the Bases Agreement.  As director, vice president and eventually the President of the Philippine Chamber of Industries, he debated with representatives of the American Chamber of Commerce and the now-defunct Free Enterprise Society.  As a cabinet-ranked Chairman of the National Economic Council, he took on the American Embassy and the US Agency for International Development.

He was reviled in poison pen letters, rebuffed by government officials and sneered at by Americans, but with his 2 books, 1 documentary movie, 10 pamphlets, 5 newspaper columns, 1 television program, 1500 public debates and speeches, and 2500 press statements, he almost single-handedly persisted in his “lonely battle” and lived to see all his battle won.  Just look at the record: