Dependent Independence The U.S. Informal Empire in the Philippines, 1946-1954 Benjamin Burggraaf Master Thesis Erasmus School of History, Culture and Communication Erasmus University Rotterdam Student Number: 388170 E-mail: [email protected] Supervisor: Prof. Dr. B. Wubs Second Reader: Dr. S.K. Manickam July 25, 2018 Contents List of Abbreviations ...................................................................................................................... 3 Chapter 1 – Introduction ................................................................................................................. 4 Research questions ...................................................................................................................... 5 Historiography ............................................................................................................................. 6 Method ...................................................................................................................................... 14 Chapter 2 – The Colony, the Commonwealth, the Crony: the development of Philippine- American relations ........................................................................................................................ 17 Introduction ............................................................................................................................... 17 American colonial rule .............................................................................................................. 17 The Philippine Commonwealth ................................................................................................. 20 Wartime ..................................................................................................................................... 21 Liberation .................................................................................................................................. 22 Independence ............................................................................................................................. 24 Conclusion ................................................................................................................................. 25 Chapter 3 – A Failed Democracy: U.S. Political Considerations in the Philippines .................... 26 Introduction ............................................................................................................................... 26 The Philippines: ready for independence? ................................................................................ 26 General MacArthur ................................................................................................................... 29 Roxas’ Republic ........................................................................................................................ 33 The Quirino Administration ...................................................................................................... 34 “He should be the guy”: Ramon Magsaysay ............................................................................. 39 The midterm elections of 1951.................................................................................................. 43 The 1953 national elections....................................................................................................... 45 Conclusion ................................................................................................................................. 49 Chapter 4 – Economic (in)dependence: U.S. economic policy toward the Philippines and Philippine economic development ................................................................................................ 51 Introduction ............................................................................................................................... 51 The economic debate about independence ................................................................................ 51 The Philippine Rehabilitation Act and the Philippine Trade Act.............................................. 53 U.S. business interests ............................................................................................................... 57 Other underlying interests ......................................................................................................... 60 Joint Philippine-American Finance Commission ...................................................................... 62 1 The economic crisis of 1949 ..................................................................................................... 63 The Philippines and International Financial Institutions........................................................... 64 The Economic Survey Mission ................................................................................................. 65 Foster-Quirino Agreement ........................................................................................................ 67 Reaction of American companies ............................................................................................. 68 Conclusion ................................................................................................................................. 72 Chapter 5 – Containing Communism: U.S. Geopolitical and Military Interests in the Philippines ....................................................................................................................................................... 73 Introduction ............................................................................................................................... 73 Preliminary understanding ........................................................................................................ 73 The Military Bases Agreement and the Military Assistance Agreement .................................. 75 The Huk rebellion...................................................................................................................... 78 The U.S. response...................................................................................................................... 79 The Joint MDAP Survey Mission to Southeast Asia ................................................................ 82 Defeat of the Huk rebellion ....................................................................................................... 83 The Mutual Defense Treaty....................................................................................................... 84 Conclusion ................................................................................................................................. 86 Chapter 6 – Conclusion ................................................................................................................. 87 Bibliography ................................................................................................................................. 89 Primary sources ......................................................................................................................... 89 Secondary sources ..................................................................................................................... 97 2 List of Abbreviations AFP Armed Forces of the Philippines CIA Central Intelligence Agency CIC Counterintelligence Corps Comintern Communist International DA Democratic Alliance FRUS Foreign Relations of the United States Huk Hukbalahap. Short name of the ‘Hukbo ng Bayan Laban sa Hapon’, (People’s anti-Japanese army). In 1946, the name was changed to Hukbong Mapagpalaya ng Bayan” (People’s Liberation Army) IMF International Monetary Fund MDAP Mutual Defense Assistance Program Meralco Manila Electric co. NAMFREL National Citizen’s Movement for Free Elections NSC National Security Council PKP Partido Komunista ng Pilipinas U.S. United States of America USAFFE United States Forces in the Far East 3 Chapter 1 – Introduction On October 20, 1944 the American General Douglas MacArthur resolutely waded toward the shore of Leyte, accompanied by Philippine president Sergio Osmeña.1 Two years earlier, upon his evacuation from the Philippines, MacArthur had vowed: “I came through and I shall return!”2 When he came ashore, MacArthur proclaimed: “People of the Philippines, I have returned… Rally to me!... The guidance of divine God points the way. Follow in His name to the Holy Grail of righteous victory!”3 With these words, MacArthur fulfilled his pledge. The liberation of the Philippines had begun. In the prelude to the landing, MacArthur had pressured Osmeña to join him on his return to the Philippines. He argued that otherwise, Osmeña’s prestige would suffer. Osmeña did not feel much for MacArthur’s plan. The Philippine president feared that if he were to go with MacArthur, he might find himself under his direct control, without a clear understanding of his own powers and responsibilities.4 He was already warned by another U.S. official that there would be no place for him during the liberation, as the Philippines would be under military command. But Osmeña felt like he had no other choice: “My place is in the invasion. Otherwise the Filipinos will say, ‘Where is our government? Where is our president?’ They might think I was afraid.”5 During the Leyte landing and the liberation, MacArthur completely overshadowed Osmeña. MacArthur was in charge of the liberation, and while he was at the center of attention and