The Bell Trade Act and the Philippine Economy

Abstract

T HE Philippines is fortunate in being a country with frontiers to conquer and new lands to open. Surveys indicate a vast amount of idle resources that are available for exploitation in order to increase the nation's wealth. The rate of literacy is one of the highest in Asia: in I948, 59.8 per cent of all persons ten years or more of age were literate.' The training of a skilled labor force should therefore present no insurmountable difficulties. One would expect the country to be relatively self-sufficient in many things. And yet, if the facts are examined, it is disconcerting to find that a large proportion of the country's demands must be met from imports rather than from domestic production. The immediate postwar years were of course not illustrative of this condition because they spanned a period in which the country was recovering from the ravages of conflict. However, a certain measure of normalcy returned to the economy in I948 and I949, which may be considered the most representative of recent years. (Later years cannot serve as valid examples because of the imposition of strict trade controls and the outbreak of the Korean war.) In these two years, twenty-three per cent of the national income was expended on imports. In I948, CIF imports totaled PI,3Ii.8 million and the national income amounted to P5,7I3 million; in i949, CIF imports were PI,3I3.5 million and the national income stood at P5,646 million. It is interesting to note that, prior to the imposition of trade controls, about seventy per cent of these imports consisted of consumption goods.2 The high percentage of national income spent for imports indicates the existence of a fundamental defect which prevents the Philippine