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Business in Philippines' sugar capital sours, leaving communists to prosper

By Paul Quinn-JudgeSpecial to The Christian Science Monitor / August 7, 1985

Bacolod City, Philippines

The signs of a boom are still visible here: elegant houses obviously built in the last decade, big pre-oil-crisis American cars, new faades on churches. But the boom has gone. The price of sugar, the single crop on the island of Negros, has plummeted. Many people here -- planters, businessmen, researchers -- think the sugar industry will never fully recover.

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Instead, the same people say, the old fabric of Negros society is disintegrating. There are probably about 300,000 sugar workers out of work in the province of Negros Occidental (the province's population is almost 2 million), though nobody knows for certain. There are reports of malnutrition, even starvation in more remote areas. Such reports are hotly denied by the government of President Ferdinand Marcos.

And communist guerrillas, thriving on the economic collapse, are spreading northward from their old strongholds in the south of the island. Recently they have been sighted moving in plantations on the Bacolod City limits.

Life for the sugar workers has always been miserable. Wages are rock bottom: The official minimum wage is 32 pesos ($1.60) a day. Most receive a fraction of this.

Inflation ran at about 50 percent last year. The workers have full-time employment only during the milling season, from October to April.

The rest of the year -- the dead season, people call it -- they eke out a living as best they can. The fortunate ones get odd jobs on the plantations, or the planters sell them rice on credit. Others work as subsistence farmers.

This year, because of the crisis in sugar, the dead season will last at least a month longer than usual. Many sugar planters are leaving. Those who remain say they can no longer afford to give their workers rice on credit.

Leonardo Gallardo, a local businessman and director of the privately funded Negros Economic and Development Foundation, notes that, according to government figures, by the end of last year some 36,542 children in Negros were suffering from second- or third-degree malnutrition.

Life is expected to become even harder for the sugar workers. Sugar production is declining fast. Between August 1983 and August 1984, Negros produced 1.2 million tons. This year as of mid-June, output had declined to 825,000 tons: The economic and development foundation expects it to drop another 30 percent next year.

Some planters are trying to switch to other crops. But it is hard to do this during a financial crisis. And none of the replacement crops will need as much labor as sugar.

The 1970s saw both the boom and collapse of sugar prices. The planters did well, but they say the government did even better.

After the declaration of martial law in September 1972, the sugar industry became a monopoly. First a military supervisor was appointed -- Gen. Prospero Olivas, who is currently on trial as an accessory to the murder of opposition leader Benigno Aquino Jr.

Then in 1974 the government established the Philippines Exchange to handle sugar exports. The exchange was abolished in 1977 after incurring debts of more than 1 billion pesos (then $143 million). It was replaced by the National Sugar Trading Corporation. The corporation, like its parent body, the Philippines Sugar Commission, is headed by Roberto Benedicto, one of President Marcos's oldest and closest friends.