U.S. Pays $200 Million Philippine Base Rent

U.S. Secretary of State George P. Shultz today officially signed a document transferring to the Philippine treasury $200 million in promised American aid, amid continuing complaints from aides to Philippine President Corazon Aquino that their economically ravaged country is not getting enough economic support from the United States.

The $200 million in cash that Shultz signed over to Philippine Vice President Salvador Laurel at a simple ceremony this morning represents both overdue and current payments that the United States owes to Manila under a 1983 agreement permitting America to occupy two large military bases in the northern Philippines.

“Before we react with joy like jumping chimpanzees, we should know that what Shultz is bringing in is rental money in payment for the use of the two bases,” Aquino’s executive secretary, Joker Arroyo, said in a statement timed to coincide with Shultz’s arrival Tuesday night.

For Use of Bases in ’85

“This is rental which had been budgeted but which the U.S. has yet to disburse for the use of the bases for 1985.”

U.S. Embassy officials confirmed that the $200-million allocation is part of a $900-million economic and military aid package that the United States agreed to pay as “assistance or compensation” for occupying the bases until 1989, when the current base agreement expires.

“Under U.S. law, we can’t use the word rent, “ said one U.S. Embassy spokesman who asked not to be identified by name.

After transferring the funds, Shultz said, “I’m here to sign this agreement but (also) really to say how firmly we support the new government of President Aquino and the things you are doing to revitalize the political, economic and security processes here in the Philippines.”

Laurel responded by saying that the signing ceremony was “an occasion for both nations . . . to show to the world the close relations between our two countries.”

Aquino’s economic advisers said the $200 million will be used to help offset the government’s $1-billion deficit this year and reduce its overall $26-billion national debt.

More Aid Sought

In response to requests from the Aquino government for substantially more American aid in the wake of the February coup that drove President Ferdinand E. Marcos into exile, President Reagan has authorized an additional $150 million in military and economic assistance for the Philippines, but the money has yet to be appropriated by Congress.

During Shultz’s last visit here on May 8 and 9, Aquino and her advisers complained personally to the secretary of state that they considered the sum “paltry.” Vice President Laurel asked Shultz for a total of $1 billion, but Shultz told the Philippine government that domestic constraints in America, such as the Gramm-Rudman Act, would prohibit such accelerated spending.

Instead, Shultz returned to America and announced that he was launching an international effort to raise $2 billion in public and private assistance for the Philippines--a program that Aquino’s information minister, Teodoro Locsin Jr., on Tuesday labeled “just hot air.”

Shultz is scheduled to have a private lunch today with Aquino, who considers the secretary a close personal friend. Aquino has not commented personally on the aid issue in recent weeks.

The economic assistance agreement, in effect, frees up obligatory payments for the American bases that had been frozen by the Administration and Congress as a protest over the lack of military and economic reforms under the Marcos regime. Before signing the accord, Shultz discussed the bases issue over breakfast with Defense Minister Juan Ponce Enrile and the military chief of staff, Gen. Fidel V. Ramos.

Update on Insurgency

Enrile and Ramos led the Feb. 22 coup that ultimately overthrew the Marcos regime, and the two military leaders also were planning to update Shultz on the current law-and-order situation in the Philippines, as well as the government’s efforts to end a bloody, 17-year Communist insurgency in the countryside.