Manila's troubled peace

THIS week's tragic shooting and public disturbance in the Philippines must not be allowed to undercut President Corazon Aquino's bid for national reconciliation. Not surprisingly, some critics of the government are eager to exploit the incident for political gain. Mrs. Aquino correctly expressed her deep regret for the disturbance and called for a full investigation. At least a dozen demonstrators demanding land reform were reported killed by government forces, and scores were injured, as protesters sought to break through security cordons near the presidential palace.

For Aquino, the shooting incident marks the first time that government forces have fired on protesters since her taking control of the government early last year. It comes at a particularly difficult moment. Government representatives have been meeting with officials of the communist insurgent movement in a cease-fire that is supposed to expire Feb. 6. The cease-fire has been a continuing objective of Aquino, despite her coming under intense criticism from many military officers for going ahead with the peace talks. Moreover, a number of leftists have also sought to scuttle the talks - contending that the government must show positive movement on such issues as land reform, elimination of US military bases, and inclusion of dissidents in the Cabinet before actual talks are possible. As of this writing, the two sides have suspended talks indefinitely, following the shooting, although the rebels say they will continue to observe the cease-fire.

Unfortunate as it may be, this week's disturbance need not be an insurmountable setback. Aquino has repeatedly shown her ability to turn a difficult situation into a plus. To her credit, she is still taking the political offensive. On Feb. 2 voters will be asked to approve a new constitution. Moreover, she is seeking to attract more foreign capital to the Philippines.

The economic challenge is her toughest test. The Philippines, which was the second most prosperous nation in East Asia only two decades ago (behind Japan), before the Marcos regime drained the national Treasury, is now one of the poorest. There was a slight upward turn last year - with the economy growing a minuscule 0.13 percent, compared with declines of close to 10 percent over the two previous years. The flight of capital out of the country has stopped. Inflation has also been checked.

Still, unemployment remains high. Servicing the nation's $27 billion foreign debt eats up assets needed for internal reform. Many foreign companies remain skeptical about investing in the Philippines.

The Reagan administration should step up its support for Aquino and the Philippines - in terms of economic assistance, as well as verbal support for Manila. Washington could also help persuade foreign bankers to adjust debt schedules.

Aquino's threefold reconciliation program - the cease-fire, seeking a new constitution, and rebuilding the economy - is on target. Washington must do all that it can to ensure that the Philippines remains on this road of progress.

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