Austerity package sparks grumbling against Marcos

By , Special to The Christian Science Monitor

Long lines of vehicles built up around Manila's gasoline stations Wednesday night following a government announcement of a sharp increase in oil prices, the second increase within two weeks.

Throughout Manila, wage earners were grumbling about how the price adjustments will further erode their incomes and about how their living standards have declined during the last five years.

The oil-price increase, which was necessitated by the floating of the peso's exchange rate last Tuesday, is part of a program of austerity measures worked out with the International Monetary Fund (IMF). The measures are designed to put the derailed Philippine economy back on track.

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When such a distasteful package is combined with a potentially hostile - and, since the elections May 14, much larger - opposition group in the National Assembly (parliament) - President Ferdinand Marcos will have to walk a tightrope to dispel doubts on the economic and political stability of his 19-year-old regime.

The government should have begun to take the tough steps late last year, but it postponed them until after the parliamentary elections. The austerity measures are politically unpalatable. Implementing them during the run-up to the elections might have hurt Mr. Marcos's party, the New Society Movement (KBL).

But even though the austerity measures were announced in one fell swoop weeks after the elections, the Marcos government did not escape the ire of Filipinos. Unlike in Latin America, where people mostly blamed the IMF's tough conditions for their sorry lot, most Filipinos blame the government for gross economic mismanagement.

Blame is heaped on two major factors: ''crony capitalism,'' under which Marcos's economic policies tended to favor his friends in the business community , resulting in inefficient use of scarce capital; and the numerous government projects that were more showy than productive.

The economic package prescribed by the IMF's $635 million standby credit, under negotiation for some nine months now, includes a drastic cut in the government's budget deficit and a flexible exchange rate for the peso.

Indeed, the ''stabilization program'' Marcos announced last Tuesday indicates the government's willingness to bite the bullet. The program includes:

* The upward float of the peso's exchange rate, which immediately rose by 22 percent to 18 pesos to a dollar. The official rate had been 14 pesos.

* The reduction of government spending this year by 5 percent to help reduce the budget deficit from the projected 14 billion pesos ($778 million at the new rate) to 7 billion pesos.

* New taxes aimed at raising government revenue and therefore cutting the deficit.

Although elected opposition assemblymen have said they will not block the austerity measures, one of them told the Monitor: ''Austerity measures are now inevitable, but belt-tightening must start from the top and government officials must stop their profligate spending.''

But there is little Marcos can do to quell people's outrage over their economic difficulties. This silent rage could prove to be a bigger danger to his hold on office than his faltering health.

Marcos has indicated interest in seeking another six-year term in the 1987 presidential election, but he may be faced with a disaffected electorate which recently discovered it can still exert its will through the ballot box.

In last month's elections, popular resentment against the administration was manifested through massive votes for the opposition, especially in urban areas, including Metro Manila.

Another possible near-term consequence of the economic program is an increased number of ''rebelling'' members of Marcos's KBL party. Many hard-core KBL politicians have complained they were not consulted by party technocrats when the austerity measures were drawn up. As during the election run-up, when many KBL members broke away to run as independent or opposition candidates, more members - particularly those planning to run in the 1986 local elections - can be expected to dissociate themselves from the party and its economic policies.

Another issue for Marcos is the political fate of his wife, Imelda, who is minister of human settlements and governor of Metro Manila. Filipinos will be watching to see whether the austerity measures apply to her projects.

The question is whether President Marcos will reappoint her as minister and whether this would affect the party's standing in the 1986 local elections.

There is one apparent relief amid the country's economic despondency: the continuing improvement in prices of coconut products, the Philippines' largest commodity export. Coconuts have a greater impact than any other commodity, except rice, on the livelihood of Filipinos. Coconut oil prices reached an all-time high of 72 US cents a pound last month, a hefty 140 percent increase over the same period last year.

The government has propped up rice farmers by raising the government subsidy in buying price of farmer's rice. In both instances, benefits accrue to a majority of rural Filipinos, thus serving as cushions against the effects of the national austerity program.

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