U.S. to Stress Economic Help for Philippines : Weinberger Meets With Aquino, Says Some Arms Aid Is Needed to Strengthen Military

Defense Secretary Caspar W. Weinberger and President Corazon Aquino agreed Monday that the United States should concentrate on economic aid in its support of the new government of the Philippines.

In a closed meeting, Aquino told Weinberger that the country, with at least one in five Filipinos out of work, needs large-scale assistance to create jobs, according to presidential spokesman Rene Saguisag.

“Certainly the emphasis has to be on economic aid,” Weinberger told an airport news conference after his busy morning of meetings with Aquino and other Philippine leaders. “We will offer the things that the Aquino government feels are essential to have.”

He added, however, that “I think that it’s necessary to have some military assistance to continue on with the reorganization, strengthening and modernization of the Philippine armed forces that has been started so successfully.”

U.S. Use of Bases

President Reagan has requested a total Philippine aid package of $228 million in the 1987 fiscal year, which begins next Oct. 1--$125 million for economic aid and the remainder for military assistance.

The allotment is part of a five-year agreement signed by Reagan and former President Ferdinand E. Marcos to provide the Philippines with $900 million in military and economic aid through 1991, in exchange for unlimited U.S. access to Subic Bay Naval Base and Clark Air Base.

Despite budget-cutting sentiments in Congress, Weinberger said, there is a “reservoir of good will at home that will translate into very tangible aid” for the Philippines. Sen. Alan Cranston (D-Calif.) also said during a visit to Manila last week that such aid would receive bipartisan congressional support.

In Washington on Monday, Finance Minister Jaime Ongpin warned that financial problems could undermine the Aquino government. He appealed to the Reagan Administration for more U.S. assistance, particularly help in winning loans from the International Monetary Fund.

“We are in an emergency situation,” Ongpin said.

Speaking to reporters at the Carnegie Endowment for International Peace, Ongpin said he has asked the Administration to support a proposal before Congress to add $100 million in U.S. economic aid approved for fiscal year 1986, the current budget.

He said he also wants the United States to help persuade the International Monetary Fund to release $580 million in loans by June 30. These loans have been held up because the Marcos regime failed to meet budget and money-supply targets set by the IMF--targets that Ongpin said the Aquino government will also miss.

Without the aid, Ongpin warned, the Philippines will soon face a foreign exchange crisis that will “undermine not only the economy, but the new administration.”

State Department officials said the United States has not yet decided whether to support increased aid this year. A Reagan Administration task force initially recommended more aid, but officials say that the Gramm-Rudman-Hollings budget-balancing amendment may make it impossible to raise Philippine aid.

“Our assessment of their financial crisis is that it is not as bad as they say,” one American official said.

Assistance to the Philippines is largely based on compensation for the large U.S. military bases north of Manila, but both Weinberger and an Aquino spokesman said that the installations were not discussed Monday.

“The bases agreement is not an issue. It’s already been taken care of,” Weinberger said.

The Reagan Administration signed an agreement on use of the facilities with Marcos’ government in 1983. In the presidential election race between Aquino and Marcos in January and February, the issue of the American bases was raised by some Aquino supporters who want the U.S. military out of the Philippines. Aquino has said that she will respect the current agreement until it expires in 1991, and will keep her options open on any successor agreement.

On Monday, Philippine protesters who object to the American presence demonstrated outside Malacanang presidential palace, pounding Weinberger’s car as he entered the compound for his meeting with Aquino.

Weinberger was the first Reagan Cabinet officer to visit the Philippines since the near-bloodless revolution that brought Aquino to power Feb. 25. He arrived Sunday night, and in addition to Aquino, on Monday met with Defense Minister Juan Ponce Enrile; the armed forces chief of staff, Gen. Fidel V. Ramos, and Vice President Salvador Laurel.

“During the course of these discussions there was one theme,” Weinberger said. “We have come with a very simple message that we wanted to be as helpful as we could in ways to help the Philippines government realize its own priorities.”

He said he also had come to express American admiration for the way that “freedom has been returned to the Philippines.” He stressed the need for stability under the Aquino government and warned that the Reagan Administration considers the Communist-led insurgency a “serious problem.”

Weinberger did not disclose specifics of his talks with military officials here, but a Philippine armed forces spokesman called them “wide-ranging and friendly.” Philippine officers say they are seeking a range of equipment from the Americans, including fast patrol boats, helicopters and radios.

The defense secretary left Manila in mid-afternoon for a three-day visit to Thailand. On arrival at Bangkok, according to the Reuters news agency, he reaffirmed the U.S. commitment to Thailand’s security in a brief airport statement.

U.S.-Thai treaty commitments are “complete and absolute,” he said. During his visit, the United States and Thailand are expected to announce the start of formal talks on a proposed U.S. war reserve stockpile to help Thai forces cope with external security threats, informed American sources said.

Meanwhile, officials of the Aquino government went on the offensive against Marcos on the so-called hidden wealth issue at a breakfast political forum at the Manila Hotel.

Jovito R. Salonga, chairman of a presidential committee trying to track the assets of the former president and his family and friends, attacked Marcos’ contention that he amassed his huge fortune, estimated by some Aquino government officials at more than $5 billion, as a lawyer in private practice before he became president in 1965.

Referring to Marcos’ confiscated income-tax returns, Salonga said, “In his income tax return from 1966, the total assets he himself gave were no more than $65,000, so how could he have acquired Manhattan property worth $350 million and how could he have deposited hundreds of millions of dollars in Swiss banks?”

Pedro Yap, another commission member who traveled to Switzerland recently to discuss recovery of huge sums that Marcos is believed to have deposited in numbered accounts through the years, said he believes that Swiss authorities will be sympathetic to the Aquino government’s arguments “even in spite of the fact that it might mean them losing $1 billion to $3 billion.”

But lawyer Rafael Recto, who said he is representing the Marcos family’s interests in the Philippines, said he is confident that the Swiss will never open the accounts.

“Do you think the Swiss are stupid?” asked Recto, who also appeared at the morning forum. “You will collapse all the Swiss banks if you pull out those $2 billion in there. Even if Marcos owns that, they will not give it to Mr. Marcos, and also they will not give it to the Philippine government.”

Recto, who visited Marcos in Hawaii for a week over the Easter holiday, contended that the former president has been surviving through the financial aid of his supporters. “There are a lot of people sending envelopes with notes and money, and people keep sending food to him.”

Salonga also announced during the forum that his commission has ordered the freezing of all stock in the San Miguel Corp., reportedly owned by Marcos’ brother-in-law, Benjamin Romualdez. The shares represented 33% of the outstanding stock in the corporation, which manufactures the popular San Miguel beer and bottles several brands of soft drinks.

The controversial issue surfaced last week when Finance Minister Ongpin, one of Aquino’s closest advisers, said that he believed Romualdez was a hidden owner of the corporation, of which Ongpin was president for more than a decade. Aquino has since resisted efforts by her opponents to force Ongpin’s resignation.

Times staff writer Doyle McManus contributed to this story from Washington.