1. Aurellano Memorandum, p. 9.

2. Diwa Guinigundo, ''What Is Unibanking?" Diliman Review 28 (May-June 1980): 3-6.

3. Interviews with priest (anonymity requested), Metro-Manila, Philippines, May 19, 1981; priest (anonymity requested), Bukidnon, Mindanao, Philippines, December 23, 1980; priest (anonymity requested), Metro-Manila, Philippines, March 12, 1981; priest (anonymity requested), Metro-Manila, Philippines, March 6, 1981. Cf. John Doherty, S.J., "The Governments New Export Offensive," Diliman Review 28 (September-October 1980): 25-28.

4. Interviews with commercial bank executive (anonymity requested), Metro-Manila, Philippines, March 9, 1981; investment house executive (anonymity requested), Metro-Manila, Philippines, May 24, 1981; investment house executive (anonymity requested), Metro-Manila, Philippines, December 14, 1980, and March 11, 1981; and administrative assistant to commercial bank president (anonymity requested), Metro-Manila, Philippines, April 10, 1981.

5. Central Bank, Circular No. 739 , p. 22.

6. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 6.

7. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Government's Statement of Policy on the Future Evolution of the Financial Sector," March 13, 1981, p. 2; World Bank and IMF, Philippines: Aspects of the Financial Sector , World Bank Country Study, May 1980, p. 79. See also Philippines Daily Express (Manila), September 26, 1979. Virata's description was repeated by Leung (January 15, 1981).

8. Central Bank, Circular No. 739 , p. 7.

9. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, pp. 6-7.

10. IMF, Staff Report for the 1980 Article IV Consultation and Review of Standby Arrangement , EBS/80/159, July 16, 1980, p. 10.

11. Central Bank, Circular No. 739 , p. 19.

12. Ibid., pp. 19, 26. See Manila Journal , March 17-23, 1980.

13. On this, see Sixto K. Roxas, "Unibanking: The Philippines Third Wave," Fookien Times Philippines Yearbook 1981-82 (1981), p. 164.

14. Interviews with IMF official (anonymity requested), November 25, 1980; and World Bank official (anonymity requested), March 4, 1981. See any of the versions of the World Bank and IMF joint report on the Philippine financial sector.

15. Interview with Fabella, December 8, 1980. Cf. Fabella's quotes in Times Journal (Manila), February 8, 1980; and Leo Gonzaga, "Buying Up the Market," Far Eastern Economic Review (November 27, 1981): 51.

16. Interview with Fabella, December 8, 1980.

17. The 1,034 rural banks controlled only 2.3 percent of the financial system's assets. See Ibon Databank, The Philippine Financial System — A Primer (Manila: Ibon Databank, 1983), p. 9. This excellent primer by the Manila-based Ibon research institute is the best reference source on the Philippine financial sector.

18. The five were PNB, United Coconut Planters Bank, Metropolitan Bank and Trust Co., Philippine Commercial and Industrial Bank, and Allied Banking Corp. (Guy Sacerdoti, "Postscripts to a Trauma," Far Eastern Economic Review [March 26, 1982]: 89).

19. This former savings bank was Family Bank, which became a commercial bank in 1981 and an ECB in September of 1982. Of the top fifteen banks (ranked by assets as of 1978)—PNB, Citibank, Bank of the Philippine Islands, Metropolitan Bank and Trust Company, Allied Banking Corporation, United Coconut Planters Bank, Far East Bank and Trust Company, China Banking Corporation, Rizal Commercial Banking Corporation, Philippine Commercial and Industrial Bank, Consolidated Bank and Trust Company, Equitable Banking Corporation, Pacific Banking Corporation, Manila Banking Corporation, and Insular Bank of Asia and America only six (China Bank, Rizal Commercial, Consolidated, Equitable, Pacific, and Insular) had not become ECBs as of August 1982 (Philippines: The Economy That Came Up Smiling," Euromoney [April 1979]: 33; "Financial Fiasco," Ibon Facts and Figures , no. 143 [July 31, 1984]: 7; and Ibon Databank, The Philippine Financial System A Primer , pp. 103-6).

20. Ibon Facts and Figures , no. 143 (July 31, 1984): 7.

21. Far Eastern Economic Review (January 15, 1982): 6. See also Leo Gonzaga, "More and More of the Brightest Bankers Are Going Commercial," Far Eastern Economic Review (September 24, 1982): 95-96.

22. Business Day (Manila), April 22, 1981; Euromoney (April 1979): 36-37.

23. Times Journal (Manila), July 27, 1978; Philippines Daily Express (Manila), July 22, 1980; Financial Times (London), November 11, 1980; Business Day (Manila), March 9, 1981; R. S. Ofreneo et al., "A Critique of the 1972 and 1980 Financial Reforms," University of the Philippines at Diliman, 1981, appendix A-1 (mimeographed).

24. Asia Monitor 5 (Third Quarter 1981): P-5-303; Euromoney (April 1979): 37; Business Day (Manila), April 20, 1981; Bulletin Today (Manila), October 27, 1980.

25. Quoted from Euromoney (April 1979): 36. John F. Doherty, A Preliminary Study of Interlocking Directorates Among Financial, Commercial, Manufacturing and Service Enterprises in the Philippines (Manila, 1979), p. 13. Among other links, J. B. Fernandez, Jr. (later Marcos's and then Aquino's Central Bank governor) was Bancom's vice-chairman and (as of early 1981) Far East Bank and Trusts president and chairman of the board (Ofreneo et al., "Critique," appendices B-1, B-2; Bulletin Today [Manila], January 7 and March 26, 1981).

26. Defense Minister Enrile was chairman of the board of United Coconut Planters Bank and a director of PDCP (Ofreneo et al., "Critique," appendix B-1; and "Some Are Smarter Than Others" [Manila, n.d.], p. 14 [the latter citation refers to an opposition article that was privately circulated in Manila in 1979]).

Panfilo Domingo was PNB's president and chairman of the board and also PDCP's chairman of the board (Ofreneo et al., "Critique," appendix B-2).

27. Quoted in Business Day (Manila), April 14, 1981. Cf. Business Day (Manila), April 15, 1981.

28. Leo Gonzaga, "The Wizards Are Disappearing," Far Eastern Economic Review (November 15, 1984): 85.

29. Interviews with Licaros, April 1, 1981; former Central Bank deputy. governor (anonymity requested), February 9, 1981; Central Bank staff member (anonymity requested), March 19, 1981; and Ministry of Finance staff member (anonymity requested), December 3, 1980.

30. Remarks of the United Democratic Opposition (UNIDO), quoted in Business Day (Manila), January 16, 1981.

31. Interview with Philippine government official (anonymity requested), March 6, 1981.

32. Central Bank deputy governor, quoted in Euromoney (April 1979): 30; and Ibon Databank, Primer on Philippine Commercial Banking (Manila: Ibon Databank, 1979), p. 13. Prior to 1972, TNBs had been barred from taking equity in the Philippine financial sector, but the four wholly foreign-owned banks (Bank of America, Citibank, Hong Kong and Shanghai, and Standard and Chartered Group) that were active in the country before the 1947 ban were allowed to retain their operations (Maria Socorro L. Africa, "Participation of Offshore Banking Units [OBUs] in the Peso Market: Implications for Domestic Credit and the Money Supply," Master's thesis, School of Economics, University of the Philippines, 1980, pp. 1-2; Robert Stauffer, "Philippine Martial Law: The Political Economy of Refeudalization," in Marcos and Martial Law in the Philippines , ed. David A. Rosenberg [Ithaca, N.Y.: Cornell University Press, 1979], p. 214).

33. "How Successful Was the Bank Build-Up Drive?" Asian Finance (January 1976): 29.

34. Interview with IMF official (anonymity requested), November 25, 1980. The Philippine government added other incentives to spur this TNB involvement in 1981. See Far Eastern Economic Review (September 11, 1981): 81.

35. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 3.

36. Ibon Databank, Philippine Financial System — A Primer , pp. 194-96. See also Robyn Lim, "The Multinationals and the Philippines Since Martial Law," in A Multinational Look at the Transnational Corporation , ed. Michael T. Skully (Sydney: Dryden Press Australia, 1978), p. 131; and Renato Constantino, The Nationalist Alternative (Quezon City: Foundation for Nationalist Studies, 1979), p. 35.

37. Frederick R. Dahl, "International Operation of U.S. Banks," Law and Contemporary Problems 32 (Winter 1967): 111.

38. Aurellano Memorandum, p. 9.

39. Interviews with Licaros, April 1, 1981; former Central Bank deputy governor (anonymity requested), February 9, 1981; Central Bank staff member (anonymity requested), March 19, 1981; and Finance Ministry staff member (anonymity requested), December 3, 1980.

40. "OBUs Join Credit Debate," Asian Finance (June 15-July 14, 1977): 85. Cf. World Bank, Poverty Report 2984-PH, draft, p. 129.

41. Interview with national entrepreneur (anonymity requested), March 13, 1981. Similar statements made by Henares, February 27, 1981.

42. On this global phenomenon, see Richard J. Barnet and Ronald E. Müller, Global Reach: The Power of Multinational Corporations (New York: Simon and Schuster, 1974), p. 152; and UNCTAD, Marketing and Distribution of Tobacco , TD/B/C.1/205, 1978, p. 21.

43. Asian Finance (June 15-July 14, 1977): 86. For more statistical information on TNCs' penetration among the top 1,000 Philippine corporations, see United Nations, Economic and Social Commission for Asia and the Pacific, Joint CTC/ESCAP Unit on Transnational Corporations, Monitoring and Regulating Transnational Corporations in the Philippines , Working Paper 11, August 1980.

44. IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 46.

45. Walden Bello, David O'Connor, and Robin Broad, "Export-Oriented Industrialization! The Short-Lived Illusion," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), p. 155.

46. Interview with Central Bank staff member (anonymity requested), April 14, 1981.

47. Calculated from computer printouts on U.S. direct foreign investment abroad, supplied by U.S. Commerce Department, 1981. Profit rate equals income plus fees and royalties as percent of total investment.

48. Nationalist Resource Center, U.S. Imperialism in the Philippines (An Anti-Imperialist's Sourcebook ) (Manila: Nationalist Resource Center, 1980), p. 38.

49. "Philippines: The Economy That Came Up Smiling," Euromoney (April 1979): 30.

50. Quoted in E. P. Patanne, "Slow Development in Manila," Asian Business (July 1981): 44.

51. Louis Kraar, "The Philippines Veers Toward Crisis," Fortune (July 27, 1981): 36. It should be emphasized that illegalities are not completely alien to TNCs themselves. A 1980 Fortune study examining the activities of 1,043 major TNCs concluded that 11 percent had committed at least one of the following five crimes between 1971 and 1978: bribery (including kickbacks and illegal rebates), criminal fraud, illegal political contributions, tax evasion, or price fixing. The 11 percent figure is actually a minimum, as Fortune included only cases of actual conviction on federal criminal charges or cases resulting in consent decrees ("How Lawless Are Big Companies?" Fortune [December 15, 1980]: 57).

52. Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, N.J.: Princeton University Press, 1979), p. 162.

53. For more on what Fortune (July 27, 1981, p. 37) calls the "crony problem," see Walden Bello, David O'Connor, and Robin Broad, "Technocrats Versus Cronies," in Bello et al., Development Debacle , pp. 183-95.

54. Philippines (Republic), Central Bank, Office of the Governor, "Industrial Finance Fund: Proposed Statement of Policy and Operating Procedures," April 1981, p. 4.

55. Asiaweek (May 1, 1981): 36.

56. World Bank, "Operating Policy Guidelines of ADFU," April 1, 1981, p. 2. See "IMF Stand-by Arrangement with RP," Central Bank (of the Philippines) Review (August 1981): 8.

57. Asian Wall Street Journal , February 10, 1981.

58. Interview with Manila-based TNC executive (anonymity requested), February 13, 1981.

59. As was explained in Chapter 1, the use here of the term triple alliance focuses only on Filipino institutions, whereas Evans's triple alliance includes both international and national institutions.

60. For more on how this industry-finance-government hookup works in Japan, see Andreas R. Prindl, Japanese Finance: A Guide to Banking in Japan (Chichester: John Wiley and Sons, 1981); Alexander K. Young, The Sogo Shosha: Japan's Multinational Trading Companies (Boulder, Colo.: Westview Press, 1979); Hugh Patrick, ed., with Larry Meissner, Japanese Industrialization and Its Social Consequences (Berkeley and Los Angeles: University of California Press, 1976); Hugh Patrick and Henry Rosovsky, Asia's New Giants: How the Japanese Economy Works (Washington, D.C.: Brookings Institution, 1976); Chalmers Johnson, M/T/ and the Japanese Miracle: The Growth of Industrial Policy, 1925-75 (Stanford, Calif.: Stanford University Press, 1982).

61. Interview with IMF official (anonymity requested), November 25, 1980. See Gonzaga, "More and More of the Brightest Bankers Are Going Commercial," pp. 95-96.

62. See Aurellano Memorandum, p. 6; Ibon Databank, Philippine Financial System — A Primer , pp. 42-49.

63. Doherty, Preliminary Study of Interlocking Directorates , p. 100; John Doherty, S.J., "Who Controls the Philippine Economy?" in Cronies and Enemies: The Current Philippine Scene , ed. Belinda A. Aquino (Honolulu: Philippine Studies Program, Center for Asian and Pacific Studies, University of Hawaii, 1982), pp. 7-35.

64. Vyvyan Tenorio, "A Blueprint Bogged Down," Far Eastern Economic Review (August 1, 1980): 99. See also John Doherty, "The Government's New Export Offensive," Diliman Review (September-October 1980): 25; and Ngo Huy Liem, Promotion of General Trading Companies in an Export-Oriented Economy: The Philippine Experience (Freiburg: Institute for Development Policy, 1982).

65. For specific names and holdings, see Doherty, Preliminary Study of Interlocking Directorates , and "Who Controls the Philippine Economy?"; Ofreneo et al., "Critique," p. 64 and appendix B-1; Asian Finance (May 15, 1980): 76; Manila Journal , March 17-23, 1980.

66. Aurellano Memorandum, p. 6.

67. Ibid.

68. Interview with Fabella, December 8, 1980. Cf. Central Bank, Circular No. 739 , p. 22.

69. Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 61 , sec. 21-B; Central Bank, Circular No. 739 , pp. 54-55. These limits were generous when compared to other countries where such financial-industrial equity hookups are allowed. In Japan, the limit for a single investment has fluctuated between 5 and 10 percent of a financial institution's capital (Young, Sogo Shosha , p. 36; Prindl, Japanese Finance , p. 25). In Singapore, the limit on total equity investment stands at approximately. 40 percent of net worth; in Mexico, at about 25 percent of total resources (David SyCip, "Statement of Views re: Proposal to Permit/Encourage the Development of Multi-Purpose Financial Institutions," Bankers' Association of the Philippines, Manila, November 20; 1979, p. 3).

70. Central Bank, Circular No. 739 , p. 54.

71. SyCip, "Statement of Views," p. 3.

72. NEDA, Economic Report on the Philippines, 1978-1980 (Manila: NEDA, December 1980), p. 3. Cf. World Bank and IMF, Philippines: Financial Sector , May 1980, p. v.

73. World Bank and IMF, Philippines: Financial Sector , May 1980, p. 76.

74. Ibid., pp. 76-77. Cf. Millard Long, Review of Financial Sector Work , World Bank Industry Department, October 1983, p. 39.

75. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980, attachment 1, p. 4.

76. Interview with Macaraig, February 23, 1981. See Far Eastern Economic Review (April 16, 1982): 5.

77. IMF, Philippines — Staff Report for the 1982 Article IV Consultation , SM/82/55, March 24, 1982, p. 9; Far Eastern Economic Review (April 30, 1982): 41. The original 1981 net domestic asset ceiling (an IMF performance criterion) was raised during the IMF's mid-1981 review "to accommodate the financial rescue operation" (IMF, Staff Report , March 24, 1982, pp. 6, 9).

78. IMF, Staff Report , March 24, 1982, p. 9.

79. Evans, Dependent Development , p. 278.

80. "On the Takeover Trail," Far Eastern Economic Review (September 11, 1981): 61.

81. Ibid.; Leo Gonzaga, "High Noon in Manila," Far Eastern Economic Review (March 19, 1982): 74; Business Day (Manila), April 20, 1981.

82. Leo Gonzaga, "The High Cost of Help," Far Eastern Economic Review (October 4, 1981): 104.

83. Marc Frons, "A Little Help for Some Friends?" Newsweek (August 10, 1981): 40.

84. Leo Gonzaga and Guy Sacerdoti, "Operation Cold Comfort," Far Eastern Economic Review (May 14, 1982): 87.

85. Ibid.; see also Guy Sacerdoti, "Delta's Dire Straits," Far Eastern Economic Review (April 16, 1982): 63.

86. Gonzaga, "High Noon in Manila," p. 74.

87. Quoted in Kraar, "The Philippines Veers Toward Crisis," p. 37. See Ascher Memorandum, pp. 2, 12, 14.

88. Conversation with Philippine government official (anonymity requested), Policy Conference on Tariff Reforms, April 23, 1981. Sentiments repeated by other government officials.

89. For more on these appointees, see Central Bank (of the Philippines) Review (August 1981): 13; Bello, O'Connor, and Broad, "Technocrats Versus Cronies," pp. 183-85; World Business Weekly (August 24, 1981): 11-12; Renato Constantino, "The World Bank's Trojan Horses," Far Eastern Economic Review (August 14, 1981): 39.