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INFORMATION to USERS the Most Advanced Technology Has Been INFORMATION TO USERS The most advanced technology has been used to photo­ graph and reproduce this manuscript from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are re­ produced by sectioning the original, beginning at the upper left-hand corner and continuing from left to right in equal sections with small overlaps. Each original is also photographed in one exposure and is included in reduced form at the back of the book. These are also available as one exposure on a standard 35mm slide or as a 17" x 23" black and white photographic print for an additional charge. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6" x 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. UMI University Microfilms international A Bell & Howell Information Company 300 Nortfi Zeeb Road. Ann Arbor, Ml 48106-1346 USA 313/761-4700 800/521-0600 Order Number 9001983 The political economy of the Philippine sugar industry Ku, Charng-Yeong, Ph.D. The Ohio State University, 1989 Copyright ©1989 by Ku, Chamg-Yeong. All rights reserved. UMI 300 N. ZeebRd. Ann Arbor, MI 48106 THE POLITICAL ECONOMY OF THE PHILIPPINE SUGAR INDUSTRY DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of the Ohio State University By Charng-Yeong Ku, LL. B ., M.A. * * The Ohio State University 1989 Reading Committee: Approved By R. William Liddle Bradley M. Richardson David Pion-Berlin Advisor Department of Political Science Copyright by Charng-Yeong Ku 1989 To my wife, my daughter, and my mother 11 ACKNOWLEDGEMENTS To complete this dissertation is one of the greatest dreams I have ever had. Before starting this research, I was not confident that I would get this job done. This dissertation is not a work of one, but many. Thus, a lot of thanks need to be given. Professor R. William Liddle is the first person who deserves recognition and thanks. It is through his intellectual revelation that I got involved in the field of political economy. In effect, my interest in the Philippine sugar industry originated from one of his assignments in the course of political development--"The Philippine Sugar Crisis," (Alfred McCoy, 1982). Later, due to his encouragement and guidance, I was inspired to further study on the political economy of the Philippine sugar industry. To him, I owe my greatest debt. Professor Bradley Richardson and Professor David Pion- Berlin are also very helpful to this study, because of their valuable criticisms and comments. Besides, I am particularly indebted to my friend--Dr. Khai Leong Ho, who continually shares with me not only his intellectual thinking but also his experience in writing a dissertation that helps me a lot. I am also grateful to three of my colleagues--Yujen Chou, Hsianfen Hemstock, and Joushieh Wu, for their comments on some chapters of this dissertation. iii Further, my debts have to extend to my mother, a widow since 1972, whose spiritual support and financial assistance are invaluable and priceless. She is always pleased and satisfied with what I have achieved, even with the bachelor degree I obtained ten years ago. Thus, I can imagine how over-enjoyed she will be about my doctoral degree. Finally, I like to give thanks to a special person-- Ching-Jen, my wife— , for her understanding and patience. While I am working on the degree, she is also working on her D.M.A. (Doctor of Musical Arts), with a specialization in piano performance. As a wife and a mother of a two- year-old baby, she definitely has to put more efforts to maintain harmony in our family. Fortunately, she will obtain her degree in September, 1989. I am not sure how much Ihuei, our daughter, contributes to our studies, but I am certain that our degrees, except the intellectual parts, are also integrated and coupled with bottles, diapers, toys, and numerous mid-night wakeups as well. IV VITA 1955 ..................... Born - Tainan, Taiwan, R.O.C. 1979 ..................... LL. B. Central Police College 1983 ......................M.A. Ohio University 1983-1989 ............... Doctoral Student Department of Political Science, The Ohio State University, Columbus, Ohio PUBLICATIONS "Some Issues in the Philippine Political Development," Chinese Ethos Monthly, Vol. 7, no.5. (May 1987). "Analysis of the August Coup in the Philippines," Chinese Ethos Monthly, vol. 7, no.10. (October 1987 ). "The Communist Movement in the Philippines," paper presented at the Public Security Academic Conference in Taoyuan, Taiwan, June 1988. FIELDS OF STUDY Major Field: Political Development, Southeast Asia Minor Field : International Organizations Studies in Political Development. Professor R. William Liddle Studies in Politics of Industrialized Society Professor Bradley B. Richardson Studies in International Organizations Professor Chadwick F . Alger TABLE OF CONTENTS ACKNOWLEDGEMENTS ....................................... iii VITA ......................................................................... V LIST OF TABLES ............................................ x LIST OF FIGURES ........................................ xiii LIST OF A C R O N Y M S ........................................xiv INTRODUCTION ............................................. 1 1. Statement of the P r o b l e m .......................... 1 2. Literature Review........ ....................... 10 A. The Philippine literature.................. 13 B. The literature of comparative politics . 22 3. Organization of the Dissertation............... 25 PART ONE FEUDALISM AND DEPENDENCY: HISTORICAL BACKGROUND OF THE PHILIPPINE SUGAR I N D U S T R Y ................................31 CHAPTER I. THE PHILIPPINE SUGAR INDUSTRY UNDER SPANISH E R A ...................................... 33 1. Birth of the Philippine sugar industry . 33 2. Rise of H a c i e n d a s ............................ 47 3. Plantation System ........................... 53 4. Hacendero-Labrador Relationship ............ 57 5. Conclusion .................................... 60 II. THE SUGAR INDUSTRY UNDER AMERICAN COLONIALISM.. 62 1. Significance of the Growing Sugar Industry.. 62 2. Factors for the Growing Sugar Industry . 67 A. Legislation................................68 B. Capital investment ...................... 73 C. New manufacturing method ..................76 3. Characteristics of the Sugar Industry . ..78 A. Dependency upon the American market. ... 78 B. Foreign-owned sugar industry ............ 80 C. Cooperative relationship between millers and planters ...................... 82 D. Evolution of the hacienda system ......... 86 vi III. THE POSTWAR SUGAR INDUSTRY (1946-74) ......... 92 1. Rehabilitation and Expansion of the Sugar I n d u s t r y ............................... 92 2. Factors for the Expanding Sugar Industry . 93 A. The Bell Trade A c t ........................ 94 B. The Laurel-Langley Agreement ............ 97 C. Increasing financing assistance ..... 102 3. Problems of the Sugar Industry Before 1974..103 A. Continuing dependence upon the American market ........................ 103 B. Comparative high production costs on s u g a r ..................................105 C. Comparative low production per hectare.. 108 4. Perspectives of the Sugar Industry (1946-1974 ) ................................ 110 A. Fil ipinization of the i n d u s t r y .......... 110 B. Family-Type enterprise ................. 116 C. The plight of sugar wo r k e r s .............. 118 5. Conclusion of Part O n e ..................... 125 PART TWO THE FLUCTUATIONS OF WORLD SUGAR PRICES . 127 CHAPTER IV. INTERPRETATION OF LOW WORLD SUGAR PRICES (1975-1985) AND ITS IMPACTS ON THE PHILIPPINE SUGAR I N D U S T R Y ...................................129 1. Adverse Climate .............................. 131 2. Increasing Use of Sugar Substitutes ....... 133 3. Failure of International Sugar Agreements .. 138 4. Sugar Policy in the Developed Countries . .. 147 A. The European Economic Community ........ 147 B. The United S t a t e s ......................... 152 5. Impact of Low World Sugar Prices on the Philippine Sugar Industry .................. 156 6. Conclusion ................................... 160 PART THREE STATE DOMINANCE: MARCOS' CONTROL ON THE PHILIPPINE SUGAR INDUSTRY ............ 162 CHAPTER V. MANAGEMENT MONOPOLIZATION .................... 165 1. Institution Control ....................... 165 2. Control of Sugar Mills ...................... 171 3. Extended Control over Sugar-Related B u s i n e s s e s ................................... 176 VI 1 4 . The Fall of the Old Oligarchy: The Lopez Family ................................. 181 5. Impacts of Management Monopolization on the Sugar I n d u s t r y ......................
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