LAST WEDNESDAY Pope John Paul II visited the slums of Manila. Afterward, a student spoke to the pope about his people's need for political freedom and economic justice. As the student knelt to kiss the papal ring, the pope lifted him up by his arms to embrace him and the crowd cheered.

Before mass audiences and face to face with President Ferdinand Marcos, the pope called for "greater repspect for human rights" and electrified the Filipino people. He arrived in the Philippines one month to the day after Marcos declared an end to eight years of martial law.

The pope's strong appeal and the response he evoked raise a serious question: How much was really changed by Marcos' declaration? The answer is important to us because of our military bases there and the Philippines' role as a pro-Western country in Southeast Asia.

Despite the end of martial law, Marcos' exceptional powers are virtually intact. He can still legislate by personal fiat. He can detain, without trial, anyone he regards as "subversive." His family and friends, who seized all significant newspapers and radio and television stations when martial law began, continue to control the mass media.

Lifting martial law was more public relations than substance, designed to impress the new Reagan administration as well as the pope. The Marcos government is still regarded by a broad cross-section of Filipinos as corrupt, incompetent and frequently repressive.

How bad is official corruption? Filipinos from all walks of life say that it is more pervasive than ever before in their history and that the worst corruption involves Marcos, his wife Imelda and their families and close associates. One popular Philippine riddle goes: "How do you do the Marcos dance?" The answer: "One step forward, two kickbacks."

It is widely believed -- and, in political terms, perception is reality -- that the Marcoses demand a cut in major investment projects as the price of governmental approval and that the amounts accumulated by them run into the hundreds of millions of dollars. Even defenders of Marcos' record freely concede, as one said, that "he can be faulted for one thing: failing to stop corruption."

Filipino businessmen who are not part of the inner circle are expressing strong opposition to Marcos, at least in private, as they find themselves victimized by official favoritism and extortion. Using his power to legislate by fiat, Marcos exempts certain firms from taxes applied to all others. One Marcos ally in the filter cigarette business, for example, is relieved from customs duties that his competitors must pay. Another, who manufactures television sets, can import Japanese component parts without paying the usual taxes.

Another Marcos tactic is to force the sale of successful businesses at a bargain price to his close associates. Filipino businessmen fear doing too well lest, as one told me, "they notice your success and make you an offer you can't refuse."

A former correspondent for the Asian Wall Street Journal described the effect on the economy: "People are afraid to go into a new line of business, because one of the Marcos's cronies, some of whom are just into primitive accumulation, may take it over."

The more desperate members of the business community have resorted to violence. Several, including one Harvard MBA, were arrested last year for joining a so-called "Light a Fire Group," which allegedly conspired to set fires to properties belonging to Imelda Marcos. Others have begun to finance the communist insurgency, in the belief that it will never be strong enough to seize power but may cause enough trouble to force a change or regime.

The Catholic Church, as well, has become increasingly open and strident in its criticism of Marcos. Last year a Catholic conference in the Southern Philippines began with a morality play about the pharaoh's abuse of Hebrew slaves in ancient Egypt. The Egyptian pharaoh, shown beating the slaves, bore an unmistable resenblance to Marcos, and the Hebrews were dressed as Filipino peasants. The political message was clear: "Let my people go."

Over 80 percent of Filipinos are Catholic. They are by and large devout, and the church is the most important nongovernmental institution in in the Philippines, with an extensive network of schools and hospitals. A large majority of the priests are staunchly anti-Marcos, and a significant minority now argue that violence is justified and required to achieve change.

The church hierarchy -- about 50 bishops -- periodically criticizes specific practices of the Marcos regime, including corruption, election fraud and the imprisonment and torture of political dissidents. The archbishop of Manila, one of two Philippine cardinals, has warned of civil violence if Marcos does not end authoritarian rule and permit fair elections.

Among all segments of the population, anti-Marcos sentiment has grown as the economy has deteriorated. Per capita income has fallen about 15 to 20 percent since Marcos declared martial law. Inflation ran 20 to 25 percent in 1979 and 1980, and wages have not risen to make up fr the increased cost of living. While unemployment officially hovers at 5 percent, underemployment is four to six times as great. Roughly three-quarters of Filipino households have an income at or below the poverty threshold. The Philippine government estimates that 60 percent of all children are malnourished.

Every informed observer believes the economic position of the average Filipino will deteriorate further over the next five years. The best hope is that the decline will not be too abrupt or severe.

Although the Marcos regime is authoritarian, the repression has been neither indiscriminate nor unrelenting. Marcos' approach is to employ the minimum coercion needed to maintain control, and even to ease up when to do so poses no threat.

For example, opposition politicians may speak out against the regime, provided the audience is not too large and the gathering is closed to the general public. In Manila, one opposition weekly newspaper is permitted and it regularly attacks Marcos' policies; but the editors are told, that if circulation exceeds 20,00 they will be shut down. A critical account of martial law was circulated in an English language edition. But an edition in Tagalog, the native language of about one-third of Filipinos, was suppressed by the secret police and the author, a former Philippine president, was charged with sedition by a military panel.

During the first years of martial law, 70,000 individuals in Manila alone were detained for political reasons, and reports of torture and mistreatment were common. Most detainees have now been released, although about 1,000 political prisoners remain, and occasional cases of torture still occur. The government continues to use preemptive arrests when a mass protest or demonstration threatens.

Meanwhile, there has been an alarming increase in reported military abuses against civilians, with the Ministry of Defense registering 150 complaints a day during one period. Soldiers rarely come from the area where they serve and often abuse the local population to deter cooperation with local insurgents.

A typical incident was reported in the American press a few weeks ago. Alexander Garsales, a farmer, father of four and lay worker in a Christian social action group, was seized at home by soldiers. Five weeks later his body, hands tied behind his back, was discovered in a deep hole in a nearby field.

What are the chances of a popular explosion, as in Iran? Filipinos do not appear likely to engage in mass action against the regime, either at this moment or in the immediate future. While anti-Marcos sentiment is increasing, the opposition to the regime is neither well organized nor particularly effecive, in part due to restrictions on the exercise of political rights.

The moderate opposition centers around half a dozen former members waged an effective political campaign against Marcos during the 1978 parliamentary elections, and polls predicted that their slate would win most of the Manila area seats. The election, however, was marked by pervasive fraud, ballot-box stuffing and voter intimidation. When the votes were counted, the opposition failed to gain a single Manila seat; in some precincts, the Marcos candidate was reported winning unanimously. Since that campaign, the ex-senators have limited their activites to speaking before small audiences, circulating political newsletters and manifestos and organizing occasional demonstrations and protest marches.

The other major organized opposition is the New People's Army (NPA) communist insurgency. The Philippine government estimates its armed strength at 3,000 to 5,000 with sympathizers in the tens of thousands or more.

Over the past few years, the NPA has acquired a Robin Hood image because of its "good behavior." Unlike the Philippine armed forces, which are notorious for preying upon the civilian population, the NPA actively seeks the allegiance of Filipino peasants.

One attorney, practicing in an area where the NPA is active, commented: "Local inhabitants are concerned when the NPA moves out. I have clients worried that cattle rustling and robberies will start again. The NPA represents law and order. They say they feel more secure with the NPA than the military."

Despite its increasing acceptability, the NPA does not now threaten the regime, nor is it close to mounting an effective challenge. It is many times outmanned and outgunned by the 250,000-man Philippine army.

But can one confidently predict that popular opposition will not threaten Marcos over the next five years? With the trends in anti-Marcos feeling and the deteriorating economic position of the average worker, spontaneous protests could erupt. If the NPA continues to exploit its Robin Hood image, it could create a broader-based movement over the next decade. Assassination also is a constant danger to Marcos. Two hundred current and former military officers were reportedly arrested last year for planning a New Year's coup attempt.

Even if Marcos is not forced out by others, he is approaching age 65. Some time in the not too distant future, if nothing else intervenes first, either ill health, old age or death will end his rule.

Whether or not Marcos survives the next five years, our interest will be affected by the evolution of Philippine attitudes toward us. The long-run prospect is for increasing nationalism, assertion of Philippine self-worth and anti-Americanism.

We have benefited so far from widespread pro-American feelings. Filipinos admire the United States and most things American. A university professor who is a viciferous opponent of Marcos and of American aid to his regime told me, "Our problem is that Filipinos are American-lovers."

In the future, however, pro-American feelings are likely to lessen. There is a wide difference in how older and younger Filipinos view the United States. Among the older generation there is strong pro-American sentiment, a product of our joint struggle against Japanese occupation of the Philippines in the 1940s, the granting of independence in 1948 and American aid over the years since.

The younger generation (over 50 percent of the population) knows less of World War II and the immediate postwar years. Its formative political experience has been government under Marcos, and younger Filipinos increasingly resent us for supporting his regime.

The critical issue for our foreign policy is how to protect U.S. interests in the Philippines -- not just for the moment, but for the longer term as well. As of today, our position is not as secure as it should be, because we are too closely identified with the Marcos regime.

A centrist Filipino journalist told me: "There is a perception that the U.S. is selling the Filipino people down the river, that the U.S. is willfully supporting Marcos. You need to be less supportive."

The primary cause of this perception was a new agreement in 1979 which doubled the amount of military aid provided to the Philippines in return for the use of our bases there.

The object of increasing aid was to secure our access to the bases. Instead, the new agreement has increased the risks by associating us with a regime that so many Filipinos find repugnant. One opposition leader recently commented that our support for Marcos could lead to "widespread and open hostility [which could] render these bases eventually untenable."

Morever, while the term of the previous base agreement ran until 1991, the new one provides for review of its provisions by January 1984. At some earlier date, the process of review and renegotiation will begin, thereby increasing once again our identification with Marcos.

How will the Reagan administration conduct relations with the Philippines?

There are already signs that it will read -- or choose to read -- the end of martial law as genuine progress, justifying warmer relations with the Marcos regime. President Reagan met with Imelda Marcos in New York for an hour last December, one of the few exceptions he made to his own rule against seeing foreign leaders before his inauguration. And a meeting between Marcos and Reagan (something that Marcos assiduously sought but never obtained from Carter, Ford or Nixon) is being considered.

Instead of seeking warmer relations, the United States should distance itself from the Marcos regime. While there is essential business which we must conduct, the relationship should be more cool, correct and formal than it is today. In concrete terms, how might we conduct a diplomacy of distancing?

We should abstain from unnecessry public acts that indicate our support for the regime. There should be a ban on high-level official visits to Manila, such as the 1977 trip of Vice President Mondale. Our ambassador should be instructed to avoid public appearances with the Marcoses that are trumpeted in the Philippine press and taken as a sign of our approval. And Marcos must not be invited to Washington.

Furthermore, we should adopt a position for the 1984 review of the new base agreement designed to disassociate us from the worst practices of the regime. As a sign of concern over widespread military abuses, for example, we might propose shifting part of the base compensation package from military to economic assistance.

A prudent foreign policy would recognize the growing opposition to Marcos, the approaching end of his rule and the unfavorable trends in Filipino attitudes toward the United States. It would therefore be designed to lessen out identification with Marcos and his government.