[ANALYSIS] Just how bad was corruption during the Marcos years?

JC Punongbayan

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[ANALYSIS] Just how bad was corruption during the Marcos years?
The Marcoses not only ransacked the economy, they also flaunted their loot to the world


We’re 3 years shy of the 50th anniversary of Marcos’ Martial Law declaration. Yet so many myths about the Marcoses still abound.

One is that Marcos supposedly holds the Guinness World Record for “World’s Most Brilliant President in History.”

Although that one’s false, Marcos does have a legitimate Guinness World Record to his name: “Greatest Robbery of a Government” to the tune of $5 billion to $10 billion. This record has yet to be beaten.

You might wonder: why such a wide estimate of the Marcos plunder?

Part of the reason is that, to this day, it’s hard to pin down the true extent of corruption during the Martial Law years. Corruption then was so rampant not just in the public sector but also – more insidiously – in the private sector.

In this article let’s look back at the horrific scale of corruption during the Marcos years.

“We practically own everything”

By no means did Marcos invent corruption. But you might say he perfected it.

When we talk of corruption in government we commonly think of bribes, rigged biddings, and kickbacks in overpriced public projects.

Sure, Marcos did his share of “traditional” corruption. But during Martial Law he wielded a trump card: absolute power. His regime’s subsequent corruption proved just as absolute.

To begin with, Marcos forcibly took over the businesses of political rivals like the Lopezes.

Meralco at one point was taken over by Imelda’s brother Kokoy Romualdez, who mismanaged and drained the company of its finances.

In fact, the expense of Imelda’s birthday celebration in Leyte in 1974 was shouldered by Meralco, and the company’s catering – including staff, silverware, and china – were flown from Manila all the way to Leyte using Meralco’s private planes. By the way, Imee Marcos’ fake graduation ceremony from UP Law was also staged at the Meralco Theater.

While he stamped out the opposition, Marcos appointed key cronies (friends and relatives) to monopolize key industries, thus forming the backbone of so-called “crony capitalism.”

To name a few of these captured industries, bananas were monopolized by Antonio Floirendo, sugar by Roberto Benedicto, and coconuts by Eduardo “Danding” Cojuangco.

Marcos also routinely issued presidential decrees that granted special privileges to his cronies.

For instance, Lucio Tan secured from Marcos substantial concessions for his beer and cigarette manufacturing businesses. Retail magnates Benny and Glecy Tantoco operated those famous duty-free shops.

Juan Ponce Enrile, whose staged assassination attempt was used to justify Martial Law, enjoyed several concessions in the logging industry.

Herminio Disini, aside from monopolizing the importation of cigarette filters, also brokered the construction of the useless Bataan Nuclear Power Plant and received $50 million in commissions (Marcos himself got $30 million out of that deal).  

Special levies, in lieu of regular taxes, fattened the pockets of Marcos and his cronies.

Arguably the most famous of these was the coco levy, essentially a tax imposed by Marcos on the coconut industry by presidential decree. Ostensibly, revenues from the coco levy – which amounted to about P93 billion – were meant to improve the welfare of coconut farmers. Ultimately, most of it got siphoned by the Marcoses and their ilk.

Multiply this scheme across the country’s major industries, and you begin to grasp the staggering degree of corruption that took place during Martial Law. Marcos and his cronies were co-conspirators in a systematic scheme to loot the Philippine economy, which, in their minds, was theirs for the taking.

In 1998 Imelda was even quoted as saying in an Inquirer interview: “We practically own everything in the Philippines, from electricity, telecommunications, airlines, banking, beer and tobacco, newspaper publishing, television stations, shipping, oil and mining, hotels and beach resorts, down to coconut milling, small farms, real estate, and insurance.”

Imelda also once said, “If you know how much you’ve got, you probably don’t have much.”

Bankrupted central bank

Besides the private sector, Marcos also prodigiously plundered the public coffers. But few people remember it came to the point where our Central Bank went bankrupt.

To understand how this seemingly impossible economic tragedy had happened, note that Marcos – again by virtue of his absolute power – routinely “raided” the treasury and other government financial institutions.

The regime was particularly infamous for its “behest loans”: Government banks and social security institutions like SSS and GSIS lent – at Marcos’ behest – huge sums to the cronies’ projects, even if many of them were wholly unfeasible. The Central Bank facilitated many of these behest loans.

In the early 1990s, prominent economist Paul Krugman came to the country and assessed what exactly had bankrupted our Central Bank.

He found that, “In essence the problem is that the Central Bank is itself insolvent. Abuse of its domestic credit creation during the Marcos era has left the Central Bank with a portfolio consisting largely of uncollectable loans…”

By the end of the Marcos regime, the old Central Bank had amassed about P300 billion in losses. On top of this, then-governor Jaime C. Laya was discovered to have overstated the Central Bank’s supply of foreign reserves.

In 1993 the Central Bank was abolished and replaced by a new institution, the Bangko Sentral ng Pilipinas, partly in a bid to leave behind its dark past.

The Central Bank’s bankruptcy was a key event in the run-up to the country’s worst postwar recession in the mid-1980s.


The Marcoses not only ransacked the economy, they also flaunted their loot to the world.

Even in their last two years in power – at the height of the economic crisis – the Marcoses had spent a whopping $68 million: $11 million on clothes, paintings, antiques, and handicrafts; $2.4 million on food, hotel accommodations, and transport; and $1.6 million on flowers alone.

When the Marcoses were exiled and fled to Hawaii, they carted off in two C-141 planes a total of 23 wooden crates, 12 suitcases, and 70 boxes and bags.

Contained therein were, among others: $9 million in cash, jewelry, and bonds; P27 million in “freshly printed” bills; 24 gold bricks; 413 pieces of jewelry including tiaras, necklaces, earrings, and brooches studded in diamonds, rubies, and sapphires.

Imelda couldn’t bring everything, of course, and had to leave behind in Malacañang relatively less valuable things like 1,060 pairs of shoes (1,800 more pairs were at Tacloban), 508 floor-length gowns, 427 dresses, 15 mink coats, and even one swan feather gown.

Years before, the Marcoses had also bought 50 or so real estate properties in New York (including the 72-story Trump Building in lower Manhattan), New Jersey, and Connecticut. Some of these were bought using Panamanian shell or dummy corporations.

Imelda was also an infamous hoarder of rare paintings, including a Monet that fetched $43 million when it was resold at a London gallery in 2010, and jewelries (3 collections are now in the Bangko Sentral’s vaults for safekeeping).

Awash with cash, Ferdinand and Imelda had also stashed about $500 million in ill-gotten wealth in Swiss bank accounts using the pseudonyms William Saunders and Jane Ryan, respectively.

Post-EDSA, you can’t blame former president Cory Aquino for urgently ordering the creation of the Presidential Commission on Good Government (PCGG), whose primary task was to recover the Marcoses’ ill-gotten wealth.

As of 2017 the PCGG has recovered P171.4 billion. Their work is far from over, yet President Duterte – a close ally of the Marcoses – wants the PCGG abolished.

Never again, never forget

We’ve barely scratched the surface. At the UP School of Economics it takes an entire semester to teach this and other economic aspects of the Martial Law years.

To be honest, researching this piece was emotionally draining. In spite of the wholesale corruption that took place during Martial Law, it’s baffling to think that the Marcoses today are firmly back in political power.

Carl Sagan once wrote, “If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken.”

Never again should Filipinos be bamboozled by the Marcoses. But to ensure that, all of us must never, ever forget. – Rappler.com


The author is a PhD candidate at the UP School of Economics. His views are independent of the views of his affiliations. Thanks to Jess Pasibe for generously sharing materials from his own research on the topic. For a suggested reading list on the economics of Martial Law, check out this Twitter thread. Follow JC on Twitter (@jcpunongbayan) and Usapang Econ (usapangecon.com).

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JC Punongbayan

Jan Carlo “JC” Punongbayan, PhD is an assistant professor at the University of the Philippines School of Economics (UPSE). His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for Rappler.com. He is also co-founder of UsapangEcon.com and co-host of Usapang Econ Podcast.