SONA 1

SONA 2

FOREIGN RELATIONS
The all pervasive basic philosophy of our foreign policy is to help secure
international peace so that in honor and in freedom we may live in its
healthy atmosphere, side by side with other nations on the basis of equality.
In my first report to you on the state of the nation, I pointed out that our
national security was anchored on our own internal strength as well as on our
cooperation with the United Nations, buttressed by regional arrangements
and by our mutual defense alliance with the United States of America.
While it must be candidly admitted that international tensions have not
subsided, the effectiveness of our position in that regard has been
demonstrated. In spite of the several international crises in 1958, on of which
exploded over Quemoyso close to our shoresthe measures and the
instrumentalities on which we depended were not found wanting. On the
contrary, they did their part in staving off a widespread holocaust.
We therefore propose to broaden our participation in the United Nations for
advancing the cause of world peace. Wit our friends in the United Nations we
shall work for this case as truly an equal partner.

We have to admit realistically, however, that this cause still has a long way
to go. The fact that power remains a threat to nations and peoples, because
others would use it to dominate them, call for the generation also of defense
power to forestall aggression. In this regard, we have to rely on the friends
and allies.
Our staunchest friend and ally is America with whom we have a treaty of
mutual defense, which even now is being perfected to bring it closer to the
ideal basis of sovereign equality.
To this end, exploratory talks on the diplomatic level are being undertaken to
bring into harmony points of divergence on the question of military bases in
this country, redefining the mutual defense concept and readjusting
Philippine-American defense arrangements with the United States.
We hope to reach a happy and realistic conclusion of this task this year in a
spirit of mutual respect and cordial understanding.
Already, we have concluded an agreement for the creation of a Mutual
Defense Board and the placement of Filipino liaison officers in American
bases in the Philippines. We have also concluded another agreement for the
complete turn-over to the Philippine Government of American military
reservations in the Manila Port area. This agreement has been actually
implemented.
In the regional defense area, the SEATO has unanimously approved at its last
Ministers Meeting in Manila our Governments proposal for consultative
liaison at Secretariat level among the three regional defense arrangements
of the free worldthe NATO, the Baghdad Pact, and the SEATO itself.
In the economic phase of our foreign relations we are continually exploring
the capability and suitability of the Colombo Plan for our development
requirements.
Without veering away from America, but rather in pursuit of our own
resolution to help in spreading the gospel of democracy in Asia, we have

drawn ourselves closer to our immediate neighbors in this part of the globe.
Last year, I paid visits of state, first, to the United States, then to Japan. In
both countries, I was received with the utmost cordiality and warm friendship
as President of the Republic. I feel that, more than anything else, both visits
resulted in the priceless boon of closer understanding and mutual esteem
between the two countries and ours.
I went to Washington on a goodwill mission, to reaffirm friendship and deeper
mutual understanding with the great leader of the Free World. I went to Japan
also, on a goodwill mission to manifest a Christian spirit towards a former
enemy with whom we would open anew chapter of friendship and amity. We
received such a hearty and fervent response from the Japanese Government
and people that they broke long established precedents to manifest
friendship. In the spirit of friendship the United States and Japan would
extend to us a helping hand. We accept this in the same spirit.
Incidental to my trip to Washington, we have been assured of a loan from the
Export-Import Bank in the amount of $75 million and $50 million from the
Development Loan Fund. Fresh advices from our Washington embassy are to
the effect that approval of the release of these loans is forthcoming. We also
received assurances that the United States Congress would consider the
settlement of the amount due us because of the devaluation of the dollar in
1933. The President of the United States has already recommended the
appropriation of the sum to the United States Congress besides economic aid
for the Philippines.
With Japan, we have concluded a cooperative agreement under which the
construction of the Marikina multi-purpose project and the extension of the
telecommunications system on a nationwide scale would be undertaken.
In our policy of moving closer to our neighbors in Asia, we have tightened
bonds of amity with them to a greater measure than heretoforewith South
Vietnam, Thailand, Indonesia, South Korea, Nationalist China, Laos,
Cambodia, India, Burma, and Malaya. The President of South Vietnam and
the Prime Minister of Malaya were recently distinguished state visitors of our
country. I propose to return such visits as soon as possible. As opportunity

offers, I shall visit as many Asian countries as possible to attest in deeds our
avowed desire to be their friend and good neighbor.
In relation to Nationalist China, we have been able to reach a tentative
agreement on a diplomatic level on the question of the so-called overstating
Chinese visitors in the Philippines. The Chinese Ambassador and our
Secretary of Foreign Affairs are finalizing this diplomatic agreement which
upholds the pertinent laws of the Philippines while at the same time
extending the highest human consideration to a friendly people.
The Department of Foreign Affairs has implemented the creation of a
legation in Rangoon, Burma, the Hague, and Netherland, and the
establishment of eight new consider posts in different parts of the world in
addition to our already established foreign embassies, legations, and
agencies. We propose the creation of separate diplomatic missions in Malaya
and Laos.
I would like also to point out the need for continued representation of our
country in international conferences and congresses, especially those of the
United Nations and its specialized agencies, as well as the international
conventions on sugar, abaca, and other export products. These are
representations we cannot afford to miss if we must maintain our
international prestige and promote our international trade.
ACCOMPLISHMENTS AND NEW GOALS
Today, the Philippines finds herself in the flux of development in spite of
many odds. Among important items in this development being attained may
be mentioned the following: (a) the conclusion of agreement with Japan to
build the multi-purpose Marikina project to generate industrial power for
waterworks and industrial use and will irrigate 6,200 hectares of ricelands;
(b) the telecommunications project which will connect the provinces, cities,
municipalities and even rural areas to Manila; (c) the completion of the Binga
hydroelectric project with a capacity of 100,000 kilowatts; (d) the extension
of the MRR to Cagayan Valley and Sorsogon with work about to be started;
(e) the construction of a Mindanao development road system of almost 800

kilometers, of which 419 kilometers have already been completed; (f) the
establishment of a merchant marine to increase our tonnage of foreign
shipping through the acquisition of 12 ships by the NDC with a total deadweight tonnage of 130,000 and an additional tonnage of 35,200 already
obtained through the Reparations Agreement, our immediate goal here being
500,000 tons of foreign shipping; and (g) the establishment of new industries
in 1958, among the most important of which being the multi-million peso
Republic Flour Mill with four others to follow; and (h) the establishment of a
ramie processing plant in Davao.
But with all these we have still to achieve many other advances. We have
vaster economic frontiers to explore, other goals to attain, among which may
be mentioned the following: (1) the establishment of our integrated steel
industry with three units principally in Ilagan where cheap Camarines Norte,
and still another one in Angat, Bulacan, for which a loan of $74,000 from the
U.S. Export-Import Bank has been solicited and reported due soon; (2) the
exploitation of our laterite mines in Surigao; (3) the propulsion of the oil
mining industry in Cagayan Valley, Cebu, etc.; (4) the building and
intensification of feeder roads in agriculturally developing areas like
Mindanao and Cagayan Valle; (5) the building of the Luzon super-highway;
(6) the modernization of inter-island shipping with a view to cheapening the
fare and improving the service;(7) the construction of adequate modern
airports and strengthening of the PAL to enable it to enter in to the
international aviation service; (8) the realization of the reclamation projects
for Manila, Cebu and other ports; (9) the intensified development of home
and cottage industries; (10) the acceleration of production of rubber and
cotton; (11) the greater development of fishing, livestock and dairy
industries; and (12) the building of the Angat hydro electric project for
industrial power, river control, and irrigation to be financed out of the
Development Loan Fund of $50 million, also reported for industrial power. It
is bigger than the Marikina project. Its reservoir will have a capacity of 696
million cubic meters that will solve the water shortage of Manila and outlying
regions now served by the Metropolitan Water District. It will provide water
for irrigation of 25,950 hectares of farmland and establish flood control
facilities in 18 towns in Bulacan and Pampanga.

These objectives are the details that achieved and put together, add up to
the grand totalthe realization of the nations aspiration to establish a well
balanced agro-industrial economy.
But let us not lose sight of the fact that the principal limiting factor to the
attainment of the goals I succinctly summarized is the supply of foreign
exchange. It is in connection with this problem that a more deliberate study
should be undertaken. We can, however, take comfort and even pride from
the achievement that whereas in 1957 our dollar reserve faced a balance-ofpayment deficit of $124 million, in 1958 we brought it down to $17 million.
Still it is commonly agreed that we have the imperative need of increasing
the supply of dollars. We have the following ways open to us, viz., (1) the
further expansion of our export industries; (2) encouragement of the right
kind of foreign investment; (3) tapping all possible resources from abroad,
including loans and procurement of productive machinery on a deferred
payment plan; (4) the abolition of the barter trade and the no-dollar import
law; and (5) the utilization of reparations payments to capital investment.
The procurement of goods and services under the reparations program will
help finance the foreign exchange needs of our economic development. In
1957-1958 the total goods and services contracted for or procured by the
Reparations Commission amounted to over $70 million, of which $42.6
million has been spent to meet the needs of the government projects and
$27.4 million channeled to private industry. The Administrations policy is to
allocate in an increasing measure future procurements under the program to
meet the needs of the private sector of our national economy. However, in
order to ensure the maximum utilization of reparations goods for the
realization of the countrys development policies, it is desirable to amend the
Reparations Law. Such desirable amendments I shall specify forthwith.

The implementation of Republic Act No. 1410, more popularly known as the
No-Dollar Import Law or the Barter Trade Law, has resulted in the drainage of
our Barter Trade Law, has resulted in the drainage of our dollars at a rate
roughly estimated at $80 million a year.

Likewise, the duty-free importation of so-called personal effects by returning

residents has opened the way to flagrant abuses and frauds, thus depriving
the government of badly needed revenues. It has offered new temptations to
graft and corruption.
The operation of this law has given rise furthermore to over-shipment, downgrading, and under-pricing of exports and over-pricing of imports, enabling
the perpetrators of these evil practices to salt away in foreign countries
millions of dollars that should have gone to our reserves.
To do away with these evils and abuses, it is strongly recommended that Act
No. 1410 be repealed and all the offices created under it, abolished.

SONA 3

THE FILPINO FIRST POLICY

The Filipino First policy of this administration received a resounding popular
indorsement in the last election. Politically we became independent since
1946, but economically we are still semi-colonial. This is especially true in
our foreign trade. This policy is therefore designed to regain economic
independence. It is a national effort to the end that Filipinos obtain major and
dominant participation in their own national economy. This we will achieve
with malice towards none and with fairness to all. We will accomplish this
with full understanding of our international obligations towards our friends of
the Free World. We will carry this out within the framework of our special
relations with the United States to whose citizens we granted until 1974, by
Constitutional provision, equal rights as Filipinos in the exploitation of our
natural resources and public utilities, and to whom we also granted trading
parity rights under the Laurel-Langley Agreement. Under this policy we will
welcome friendly and understanding foreign capital willing to collaborate
with us in the exploitation of our vast natural resources preferably on joint
venture basis.
It is my hope that legislations under this orientation will be enacted this year.

The Problem of Barter

Last year I recommended the repeal of Republic Act No.1410 with a view to
plugging the loopholes provided through barter. While this law was repealed,
another law, Republic Act No. 2262, was approved, designed to provide
incentives directly to producers. This was done, I understand, in realistic
barter. Undeniably, there are also a few marginal industries on which the
employment of a large number of our people actually depend and for which
barter alone offers better chances of survival.
In this connection I beg to announce that the rice and corn surpluses of 1959
are bigger than the 1958 surpluses, an eloquent proof of the success of our
program for self-sufficiency in food. We shall also have an estimated surplus
of about 20 million kilos of Virginia tobacco this year. But all these surpluses
cannot be profitably sold for dollars abroad. The NARIC has failed, for lack of
adequate financing, in the price support program for rice and corn. It is
increasingly becoming difficult for the Central Bank to finance the tobacco
price support under the present law. In rice and corn, prices have gone down
lower than production cost. It has therefore become imperative that we
decisively act to find the solution to these problems. Meantime barter for
these surpluses seems the only way to provide a. incentive directly to
producers.
FOREIGN RELATIONS
Our accomplishments in the field of foreign relations in 1959 have raised the
prestige of the Philippine Republic before the eyes of the world. More and
more, our voice is heard with greater respect in international councils. We
have evolved a foreign policy whose cornerstones are the upholding of
national honor and dignity and the promotion of a world peace with justice
and honor and freedom for all. We are of the Free World, and as such we
desire closer ties with all its members, particularly with the leader thereof
and our neighbors in Asia.

In pursuit of this policy I made a State visit to the Republic of Vietnam during
1959 and cemented with that nation a most cordial relation. I expect to make
a similar visit this year to Malaya.
In the negotiations for the revision of the Military Bases Agreement with the
United States, the two governments in a common effort to enhance further
their long-established friendship reached the following points of accord:
1. Reduction of the life of the bases lease from 99 to 25 years;
2. Considerable delimitation of bases areas, relinquishment by the United
States of approximately 118,000 hectares of land, and actual transfer of the
Olongapo Community to the Philippine Government;
3. Previous consultation with the Philippine Government on the military
operational use of the bases for purposes other than the mutual defense of
both countries;
4. Previous consultation with the Philippine Government before I the United
States could put up missile launching sites in the Philippines; and
5. Elevation to treaty commitment of United States responsibility to repel
instantly attack on any portion of the Philippine territory.
We are determined to pursue this course of action until all irritants in
Philippine-American relations shall have been removed.
Activation of the Philippine Omnibus Claims resulted in the actual payment to
the Philippines of $23 million for gold devaluation, favorable endorsement by
the State Department of $73 million for additional war damage payments,
and adjustments in our obligations under the Romulo-Snyder Agreement.
Plans are being worked out and steps have been taken for the reexamination
of the claims rejected by the United States.
We have also reached agreement with Taipeh on the final liquidation of the
ten-year-old Chinese deportee problem.

We are exploring the possibilities of expanded trade with Australia, Germany,

Israel, New Zealand, Pakistan, South Korea, Spain, Taipeh, and Vietnam.
In the United Nations we have played an active role for the attainment of
world peace completely free from the nightmare of a nuclear war. We have
co-sponsored the resolution for the continuance of the 10-Power
Disarmament Committee and the reference thereto of new disarmament
proposals by Soviet Russia and the Western Powers.
We have concluded a Treaty of Friendship with Vietnam. We have also laid
the foundation jointly with the Malaya Government for the formation of a
South East Asia Association of States for mutual assistance.
We propose to continue with our reoriented foreign policies and; to this end, I
urge approval of the measures calculated to improve and strengthen our
foreign service corps.
SONA 4

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.

In an exclusive interview with Stan Swinton, general news editor of the associated press, Carlos
P. Garcia issued a strong invitation to the United States government to station atomic weapons,
including missiles, in the Philippines. The president said that any decision to station these
weapons here was up to congress, but he added he was certain congress would approve. Garcia
said the Philippines had learned from the disasters of Bataan and Corregidor that the weapon to

defend the nation should be stationed right at hand. If the United States felt it necessary, the
weapons "could be kept at American bases here rather than under the control of the Philippine
government." Reacting swiftly to President Garcia's proposal, Communist China declared the
stationing of atomic weapons in the Philippine "may lead the country to disaster."
Though he is not speaking at any official capacity, as the head of state, all the actions and words
he is going to take should be calculated for the best interest of the greater Filipino community. To
put it bluntly, Carlos P. Garcia was turning the Philippines into a U.S Military nuclear missile
Launchpad. The introduction of American atomic bombs and rockets to Filipino territory will in
no way strengthen the country, security. American missile and nuclear bases will, on the contrary,
tighten the grip on the Philippines' neck. What made it even worse is that he didnt even demand
control by the Philippines government over the atomic weapons. This could cause a disruption in
the peace and security in the Eastern world. Recklessthat is the only word appropriate to
describe the statement made by Carlos P. Garcia. Fortunately, the U.S. officials acknowledge the
invitation of Carlos P. Garcia but has no plans to base any missiles in the Philippines.