Foreword by Juan L. Manuel, Secretary of Education
Written for Larry Henares’ book, “Suns and Stars Alight”
By Honorable Juan L. Manuel
Secretary of the Department of Education
Republic of the Philippines
1976, before the betrayal of Marcos, Virata, Fernandez, Jimmy Ongpin etc.
The good old days were economically speaking never that good. Prewar Philippines, then a colony of the United States was a feudal, agricultural, export-import-oriented backward country, dominated by land-owners and foreign trading corporations. Even the candies we ate and the soap we used, made out of Philippine sugar and coconut oil, were imported from the United States.
The Second World War laid waste our country’s meager resources and made us realize the importance of economic self-sufficiency. At the same time World War II in the United States gave rise to tremendous advances in all areas of human endeavor, particularly in technology, management and economics.
After the war an economically prostrate Philippines accepted Independence from the United States along with “parity rights”, the right of Americans to enjoy the same rights as Filipinos to operate public utilities and exploit national resources, later to operate “all forms of business activities”.
The War became a demarcation line between the old generations of Filipinos with a lingering sense of gratitude to Americans, comforted by the pastoral peace of an agricultural economy, and a new generation, heirs to the great advances of the war years, born without an umbilical cord to the colonial past, restless, independent, whose destiny it was to rebuild our nation out of the ashes of World War II.
Hilarion M. Henares, Jr. was of this new generation, the “New Filipino” as President Marcos was to label them in the 1970’s.
The Philippines of 1970’s, a modern industrial nation, independent, nationalistic and proud, is the result of the struggles of the 1950’s and 60’s in which Henares and his generation played their part. Fiercely nationalistic, Henares chose as his field of battle the area of economics. There are many milestones that marked our way to economic emancipation and Henares was there first. He was a visionary, a gadfly, and achiever whose writings, speeches, TV programs, actions and actuations prodded this country almost against its will to accept the challenge of change in the postwar years.
Consider these milestones:
1. The Management Revolution:
In the 1950’s, fresh from the Massachusetts Institute of Technology (MIT), Henares visited one Filipino firm after another, and like Frank Gilbreth before him he proposed: “Let me handle your firm for a year and I’ll double your profits. Just give me 10% of the profits over and above twice your profits now.” He was consultant to 20 large firms, and for the first time, scientific Management in project study, production planning, work simplification, wage classification and financial management was applied in the Philippines. To train his managers, Henares set up a Graduate School for Management in Feati and Lyceum Universities, also for the first time in the Philippines. He was Dean of two Colleges at the age 25, and spearheaded Philippine participation in International Management Conferences.
A decade later, when Scientific Management became a regular course in all universities in the Philippines, culminating in the establishment of the Asian Institute of Management (AIM), one recalls what Lillian Gilbreth said of Henares: “Henares is the Father of the Management Revolution in the Philippines”.
2. The Industrial Revolution.
What was the exact turning point at which the Philippine government took a concrete step to revise its economic policy and embark on an all-out industrialization program? Most economists point to the time, during the era of Import Controls, when the Central Bank decided to reallocate dollar quotas on the basis of “historical pattern of import.” Before that date, in 1954, traders and agricultural export industries had priority; after that date, industries manufacturing goods for domestic consumption began to intrude on the economic scene.
It is for record that it was young Henares, then representing his own company and the Philippine Chamber of Industries, who challenged for the first time the “historical pattern import” policy of the Central Bank. He demanded and got public hearing before the Monetary Board, and after a brutal and often comic confrontation with representatives of 10 American firms, won the day for the cause of Philippine Industrialization.
Almost single handedly, young Henares lobbied for the passage of Tax Exemption Law for new and necessary industries, and prodded the Tariff Commission to issue, for the first time, tariff amendments to protect local industries.
Thus did Henares initiate the Industrial Revolution in the Philippines through Foreign Exchange Priority for Industries, Tax Exemption for New Necessary Industries, and Economic Protectionism by Tariff Amendment.
He practiced what he preached. The small paint factory he took over from his father became an industrial complex making 56 different products, and made him a millionaire before the age of 30.
3. The Revival of Nationalism.
It was Senator Claro M. Recto who unfurled the flag of Nationalism in the post-war years but his approach was mostly political, in the field of foreign policy. Henares was one of his many admirers. When Recto died, in a cocktail party where drunken Americans toasted the death of the great nationalist, Henares stood up and cried, “Recto alive was vulnerable. Recto dead is invincible”.
It was Henares who moved the field of battle into the arena of economic policy which became in turn the overriding concern of every government administration.
He took issue with the Americans on foreign investment, industrial development, the Laurel Langley Agreement, the Bell Trade Act, the Asian Common Market, Trade with Socialist countries, and even the Bases Agreement. As director, vice president and eventually the President of the Philippine Chamber of Industries, he debated with representatives of the American Chamber of Commerce and the now-defunct Free Enterprise Society. As a cabinet-ranked Chairman of the National Economic Council, he took on the American Embassy and the US Agency for International Development.
He was reviled in poison pen letters, rebuffed by government officials and sneered at by Americans, but with his 2 books, 1 documentary movie, 10 pamphlets, 5 newspaper columns, 1 television program, 1500 public debates and speeches, and 2500 press statements, he almost single-handedly persisted in his “lonely battle” and lived to see all his battle won. Just look at the record:
4. Control of Foreign Investment.
In the December 7, 1960 issue of the New York Times, Hilarion M. Henares, Jr., first came to attention of the world. There headlined on page 7, was his heretical view that Foreign Investment is not necessarily desirable as an instrument of economic progress, a view he expressed in the Businessmen’s Conference of the International Chamber of Commerce at Karachi, Pakistan, on December 6, 1960. (He introduced himself “as Chairman, and Jose Aspiras as Vice Chairman of a delegation of two.”)
By today’s standard, it was a rather innocuous statement, but it sparked a propaganda war that involved the Henares in a series of debates with the Americans and their allies in the Philippines. In the next ten years, Henares was able to prove, against all conventional wisdom, that foreign companies took out considerably more dollars than they put in, that they secured 85% of their capital expenditures from local sources, that they have considerably more privileges than their Filipino competitors, that they discriminate against Filipino employees, and that they “intrude upon centers of political power with such offensive familiarity”.
Henares made his position clear right from the start. “We welcome foreign assistance, primarily as foreign loans, secondarily as joint ventures, as partners not masters, to supplement not to supplant Filipino capital, to stimulate not to overwhelm Filipino businessmen, and only in areas where Filipinos are unable or unwilling to invest”. The phrases where originally those of Henares, but if they seem familiar to us who have listened to many a public pronouncement, it is because Henares succeeded in making his “private vision” become a “public truth”.
In these days of the 1970’s when the Lockheed and ITT scandals have rocked the political institutions of many countries, in these days when the Board of Investment has strictly hewed to the policy of social control of foreign investments, we may look back and thank Henares for what he started and fought for almost alone in the 1960’s.
5. The End of the Laurel Agreement.
Perhaps the greatest battle Henares fought was against the Laurel Langley Agreement. Earlier as a student he expressed strong opposition to the Bell Trade Agreement which gave Americans the same rights as Filipinos in the operation of public utilities and exploitation of natural resources. Later as a businessman, he assailed the Laurel-Langley Agreement for expanding American parity rights to include “all forms of business activities”.
He was relentless in his opposition to parity rights, against the prevailing view that American parity rights should be extended beyond July 3, 1974 the termination date of the Laurel Langley Agreement. As Chairman of the Economic Council, he held public hearings in all the major school schools in Manila, urging students to debate the merits of parity rights and crystallize their opinions on the Laurel Langley Agreement. For the first time, students began to demonstrate in the streets against American Imperialism. And to fan the flames of dissent, Henares began to write speeches for politicians and legislators to deliver.
Caught flatfooted by this unexpected opposition to parity rights, Americans began to argue for recognition of their “vested rights”, that is, the right of Americans already enjoying parity to keep on enjoying parity beyond the terminal date of the Laurel Langley Agreement as a matter of vested right. Henares encountered by having the National Economic Council pass it famous resolution #90 series of 1965, which denied Americans “vested rights” and advised all government agencies to limit all contract, licenses, concession, leases and other forms of authorization for American companies to period up to and not beyond July 3, 1974.
By the 1970’s before martial law, students, legislators and delegates to the Constitutional Convention were already near-unanimous in their opposition to parity rights. And in 1974, President Marcos refused to renegotiate the Laurel Langley Agreement and the termination of the agreement ended forever American parity rights in the Philippines.
For this, a large measure of our gratitude goes to Mr. Henares.
6. Trade with Developing Nations and Socialist Countries.
Henares had always expressed dissatisfaction with the traditional pattern of trade between the Philippines and the industrial nations led by the United States and Japan claiming that our nation has been reduced to an exporter of raw materials and importer of finished goods, a “vegetable garden to an industrial colossus”.
For that reason, Henares proposed as early as 1958, a Pan Malayan Common Market among the Philippines, Malaysia and Indonesia, by which he felt that a common source of materials including iron ore and oil, and a common market of 160 million people will provide a basis for the industrial development of the region. This led to Mr. Henares being asked by President Macapagal to be chief negotiator for the historic Philippine Indonesian Trade Agreement and Manila Memorandum. This further led to the establishment of Maphilindo, and later the Association of Southeast Asian (ASEAN).
In 1960, Henares proposed trade with the Socialist countries. In 1974, he was part of a mission to bolster trade with Russia and to follow up the proposal for Philippine-Soviet Trade Treaty. And today, the Philippines is trading with all Socialist countries.
Likewise, he opened the Philippine Japan Treaty of Trade, Friendship and Navigation, and the entry of the Philippines into the General Agreement on Tariffs and Trade (GATT), until the Philippines is committed to a regional common market. It is amazing to note that Henares single-handedly through a series of public debates, was able to delay the ratification of the Philippine-Japan Treaty and Philippine entry into GATT for a full 15 years, until ASEAN finally became a reality.
Also, he singled out the Military Bases Agreement for making “honky-tonk towins out of Olongapo and Angeles City”, and for “economic sabotage through the sales of tax free PX goods”. With his NEC Assistant Manuel Salientes (soon to be Undersecretary for Munitions), he established a munitions plant to lessen our dependence for ammunition on American military sources. And he called for the renegotiation of the Military Bases Agreement.
7. The Multiple Man
A writer once called Hilarion M. Henares, Jr. the Multiple Man, for Larry is an economist, engineer, industrialist, management expert, educator, essayist, poet, columnist, movie maker, photography enthusiast, electronics buff, radio amateur and civic leader, who was at one time or another, a cabinet official, treaty negotiator and senatorial aspirant.
As a public speaker and debater, he was one of the best, a familiar guest in Rotary meetings and university convocations, who invariably applied the dictum of his old professor, Father Mulry: :First all, make them laugh to open their minds. Now plant the seed of thought. Then water it with their tears”.
As a writer, he is to be found in many textbook anthologies; and his books are to be found in every library of the nation. His first two books were entitled “With Fervor Burning”, and Behold the Radiance”, titles taken from the English version of the Philippine National Anthem, like his subsequent books, “Sun and Stars Alight” and “For Us Thy Sons”.
Land of the morning / Child of the sun returning /
With Fervor Burning / Thee do our souls adore. . .
Ever within thy skies / And through thy clouds /
And o’er thy hills and seas / Do we behold the radiance /
And feel the throb of glorious liberty . . .
Thy banner dear / to all our heart /
With sun and stars alight . . . .
But it is glory ever / when thou art wronged /
For us thy sons / To suffer and die.
As a nationalist, Larry Henares was a voice in the wilderness who lived to see himself vindicated.
In 1961, Congressman Ferdinand E. Marcos pinned on Henares the “Pride of Youth” Award on the occasion of the Rizal Centennial.
In 1974, President Marcos gave him an autographed picture that said “To Larry Henares, nationalist and economist”.
The judgment of posterity will be no less.
Subsequently the Filipino people were betrayed and delivered to the IMF, GATT, WTO and the Americans by President Ferdinand Marcos, Prime Minister Cesar Virata, Central Bank Governor Jose B. Fernandez, the Opus Dei and the rest of the colonial lackeys.