Philippine economic officials have flippantly hailed the 45th annual meeting of the Board of Governors of the Asian Development Bank on May 2 to 5 in Manila as a “coming out” party for the Aquino administration to showcase the “dividends of good governance and its role in building an economy.”
On the eve of the conference, which begins today, Finance Secretary Cesar Purisima trivialized the importance of the meeting, which is attended by 4,300 finance officials from 67 countries, by saying that the publicity the Philippines will get from hosting the conference is priceless.” He added that he was confident the delegates would “create a buzz about the Philippines after attending the event.” Other officials echoed this parochial outlook, saying the conference would “improve the Philippine image in the world community.”
This is the 15th time that the Philippines, site of the ADB headquarters, is hosting the meeting since the ADB was established in 1966. Rather than being a “coming out party,” this year’s meeting is a coming of age celebration of the selection of Manila as the site of the ADB headquarters, which is on the level of the highest finance institutions of the rich Western countries—such as the World Bank and its sister institution, the International Monetary Fund, in Washington, DC. Indeed, the siting of ADB in Manila, not only put the Philippines on the map of the most important international financial institutions of the world, it also was a golden moment in the country’s economic history, proving that the Philippines could break out of its reputation as a basket case Third World country and provide the services of running the ADB competently according to modernized banking standards.
The meeting takes place when the national economy is not in the best of shape. In fact, under this administration, the gross national product growth has contracted by half—from 7 percent in 2010. This means the Aquino administration faces the tough challenge of proving its competence to revive the momentum of growth lost under its watch.
Let us be aware that when the Philippines made a bid to be the site of ADB in the early 1960s, it was favored by the confluence of events and conditions that enabled it to win international support. A fellow columnist in this paper, former ambassador Ramon Farolan, earlier made an excellent and detailed account of the Philippine diplomatic campaign to secure the support from eight countries: China, Vietnam, Iran, Pakistan, Afghanistan, Ceylon, Malaysia and Thailand—all developing Asian countries. The primary objective of the bank “is to help the economic development of the developing countries in Asia.”
The consultative committee of Economic Commission of Asia and the Far East (Ecafe) deemed it important that the bank must be located in a developing country, according to Farolan’s account. My own recollections at the time as foreign affairs reporter not only confirm the account of Farolan, but also provided me with corroborative inside information. The success of that diplomatic campaign was made possible by two factors: the leadership of Commerce Secretary Cornelio Balmaceda and a diplomatic service infrastructure composed of veteran and competent diplomats, led by Foreign Secretary Mauro Mendez.
Balmaceda was a top-grade Cabinet minister of the old school of civil servants. He rose up the ranks of the bureaucracy. He had an impeccable integrity and was respected. He was never self-promoting, but he was accessible to the media. I was covering him at the time, and his daughter Grace Balmaceda, facilitated my access to him. He was the Philippine representative to the nine-nation Consultative Committee of Ecafe.
The Philippine campaign to be the site ADB was launched during the presidency of Disodado Macapagal who I consider was the most visionary and foreign policy-oriented of post-war Philippine presidents. He launched the campaign when the country was experiencing political stability under the two-party system, The economy was robust. The GDP was growing at 5 percent. With one of the highest per capita incomes in the region in the 1950s and 1960s, the Philippines was an early leader, with a relatively advanced manufacturing sector and well-developed human capital.
All these, together with the stable political leadership, provided the environment for a successful diplomatic campaign for Manila’s selection as the site of the ADB headquarters. According to Balmaceda, what the Consultative Committee had in mind, when it approved the recommendation of the committee of experts was that the location must meet certain requirements, namely: accessibility to financial institutions, convertibility of local currency, acceptable living conditions, willingness of the country, and existence of other UN agencies. Manila had these requirements in place. In addition, it had a sound financial system and a strong Central Bank.
The committee decided that “it is not, therefore, the amount of subscription that a country can put in that will be considered in determining the location of the Bank, nor the extent of economic development it has already attained.” This ruled out Japan which was one of the biggest contributors to the fund and the most developed economy in the region.
Thus, in the third and final balloting on Dec. 2, 1965, Manila won by one vote over Tokyo as the permanent site of the ADB. That was one of golden moments of Philippine economic and political diplomacy in the post-War years.