Elite richer
The Philippine elite though was protected from the economic meltdown, to a great extent through the Marcos’ regime’s so-called “Jobo bills,” named after the banker Jose B. Fernandez, Jr., who replaced Jaime Laya as central bank governor in 1983. “Jobo” broke all monetary policy precedents and had the central bank and the National Treasury issue these bills, which had unheard of interest rates that steadily went up to as high as 60 percent in mid-1985.
The economic crisis from 1983 to 1985 reduced average Filipinos’ income (measured as per capita GNP) by a staggering 20 percent — which meant that it was only 21 years later, in 2003, that GDP per capita exceeded that of 1983.
In contrast, the Filipino elite in effect saw their funds grow 40 percent bigger through the Jobo bills they invested in. The central bank economists justified the bills as necessary to contain inflation.
Which in fact it did. Reaching a high of, believe it or not, 80 percent in mid-1984, inflation fast receded, to end up only 10 percent by the end of 1985. The rich were happy as they were much richer, ordinary Filipinos even became relieved that prices of commodities that had rocketed in 1984 returned nearly back to normal.
Marcos seemed to have recovered from his kidney transplant by 1984, and succeeded in stabilizing the economy and the political situation. The International Monetary Fund in 1985 gave the country a financial parachute in the form of a $300 million loan, called an extended fund facility, and got foreign bankers and governments not only to agree to a restructuring of the Philippines’ debt to them, but to extend a new $200 million loan so it could service its maturing debts.
Marcos’ plan for a transition from a formal dictatorship to a de facto one mimicking Lee Kuan Yew’s 31-year one-man rule in Singapore was making headway: the Parliament (Batasang Pambansa) which had 180 members, 55 of whom made up the opposition, convened in June 1984 and elected Marcos’ chief technocrat Cesar Virata as Prime Minister.
By that move, Marcos sent a message to the world that there was a clear line of succession, Virata — whom the local and foreign business community, and even the IMF and the World Bank had confidence in — and not Imelda — would be his political heir.The anti-Marcos forces were outmaneuvered. At the time of the economic crisis, Virata appeared to be the most capable to lead the country.