page_title: Economic history of the Philippines (1965–86)
section_title: The Philippine economy under martial law (1972–1981)
hierarchical_section_title: Economic history of the Philippines (1965–86) / The Philippine economy under martial law (1972–1981)
caption_attribution_description: English: “FM Declares Martial Law”—the headline of the September 24, 1972 issue of the Sunday Express, which was the Sunday edition of Philippines Daily Express. The Daily Express was the only newspaper allowed to circulate upon the declaration of Martial Law
context_page_description: The 21-year period of Philippine economic history during Ferdinand Marcos’ regime – from his election in 1965 until he was ousted by the People Power Revolution in 1986 – was a period of significant economic highs and lows.
  The early part of Ferdinand Marcos' administration continued the rising growth rate which characterized the previous administrations of the Third Philippine Republic, peaking at nearly 9 percent in 1973 and 1976. However, Marcos' later years in power saw the worst recession in Philippine history, with the economy contracting by 7.3% in 1984 and 1985.
  The dramatic rise and fall of the Philippine economy during this period is attributed to the Marcos administration's heavy dependence on foreign loans, its policy of establishing monopolies under Marcos cronies which resulted in significant income inequality, corruption by government officials, and the capital flight which has historically been attributed to the Marcos family's economic plunder.
context_section_description: Marcos declared martial law in September 1972, and because he packaged it as a way of introducing stability in light of the social unrest that had been going on since the 1970 balance of payments crisis, the business community mostly supported the move at first.  The economy continued to grow because of an international boom in the demand for key Philippine export commodities, especially sugar and coconut.  This international commodities boom led to record GNP growth in the country 1974 and 1976, despite the economic headaches brought about by the 1973 Oil Crisis.
  By the late 1970s, however, the international  commodities boom began to slow down, and the petro-dollar glut which had fueled low interest rates led international financing institutions began tightening credit, forcing the government to resort to short term loans with higher interest rates just to service its debts and to import goods.  The Philippines’ debt went up to more than 200 percent of exports in the period from 1978 to 1991, so more than half the value of the country’s exports went to debt servicing, rather than imports. 
  Marcos’ debt fueled spending, which had grown significantly during the first few years after the declaration of martial law, had funded projects which did not produce economic returns. Some of these projects were simply not yet needed at the time, while some were showcase projects which did not address the more urgent need for basic primary services. But the failure of most of the martial law era projects has been attributed to the incompetence and/or corruption of the Marcos cronies that had been put in monopolistic control over them.
  Corruption contributed to significant capital flight, and even Marcos’ immediate family were accused of participating in the plunder of the Philippine economy, with some estimates placing their "unexplained wealth" at US$10 Billion.
  The country was hit hard by the second global oil crisis of the decade, in 1979.  And when the US Federal Reserve raised interest rates in the early 1980s, the Philippines’ debt ballooned rapidly, pushing the Philippine economy towards an economic nosedive by 1983.
caption: "FM Declares Martial Law"—the headline of 24 September 1972 Sunday issue of the Philippines Daily Express - the only newspaper allowed to circulate in the first few days after the declaration of Martial Law.
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