Philippine Business Urged to Join Fight : Defense Chief Asks Help in Ending ‘Vicious Cycle’ of Poverty, War

Philippine Defense Secretary Rafael Ileto said Friday that the government of President Corazon Aquino is caught in a “vicious cycle” of poverty and war that cannot be broken without the help of private business.

“The inescapable fact in our insurgency problem is (that) it is tied to our economy,” Ileto said in a speech to a Manila-based association of foreign and Philippine entrepreneurs. “Business must break the cycle simultaneously with our peacekeeping effort. One cannot come before the other.”

Investment Appeal

Ileto, who is Aquino’s top policy planner in the war against the Communist guerrillas, appealed to the executives to invest in rural areas, where underemployment of up to 41% of the work force has helped the Communists gain a foothold in about a fifth of the villages.

“We are caught in a vicious cycle of no peace, no profit, no relief from poverty, so no peace, no profit, and so on,” Ileto said.

But he conceded that businessmen, who have shown no sign of fulfilling a promise to Aquino to be “the engine” of the country’s economic recovery, have just cause for their lingering fears, which have stifled significant new investment since Aquino became president 16 months ago.

He cited statistics indicating improvement not only in the economy but in the military, along with reduced growth of the Communist forces, and he said: “Things are looking good. But, amid these achievements, the businessmen are still nervous. And understandably so.”

The government, he said, “continues to be battered by criticisms and destabilizing moves from the left and the right.”

He mentioned in this respect not only the Communist Party and its military arm, the New People’s Army, but also a secessionist Muslim army that is threatening to renew a civil war in the south, “ultra-right” groups made up largely of renegade soldiers angered by Aquino’s moderate counterinsurgency policies, and criminal syndicates.

Assassination Attempt

In an interview with The Times after the speech, Ileto suggested that ultra-right groups may have been responsible for the recent assassination attempt on leftist leader Bernabe Buscayno, who was ambushed by men in fatigue uniforms in a Manila suburb. Nonetheless, Ileto said, the ultra-rightists no longer present a real threat to the Aquino government.

“They want to make a name for themselves against Communists, so they might be doing some of these operations,” Ileto said. “This is a danger, because they might do some things that could make the people lose confidence in the military.

“But as far as taking over the government, that is beyond them. As far as taking over the military, that, too, is beyond them.”

Base of Experience

Ileto said that he is optimistic about the country’s future, primarily because of recent indicators that show the economy to be improving.

“The economy is the basis for me, because it is only through the economy that we will really solve the insurgency,” he said.

Asked whether he believes a recent government report indicating that the economy grew by 5.5% in the first quarter, Ileto replied that he is not an economist. He said he judges the economy on the basis of his own experience--in particular his experience with pigs.

Two years ago, Ileto purchased a pig farm about an hour’s drive out of Manila. In the first year, he said, he did little to develop it, but last year he expanded it and increased his stock to 1,500. In the second year he increased his personnel from 65 to 72.

“Now,” he said, “I am expanding so fast I cannot get enough cement to build the buildings or enough corrugated iron to construct the roofs. I’m a layman but, to me, that’s the way to tell real growth.

“The very fact there’s so much development going on that we’re having shortages of cement is an indication to me that there really is some growth. And that is the most effective counterinsurgency weapon--growth.”

As for his optimism, Ileto said, “If I was not optimistic, I certainly would not expand my own piggery.”