Once ranked among the more promising of the western Pacific's "growth rim" countries, the Philippines has reached the point at which economic success is measured primarily in terms of how far things are kept from collapse.
The signs of decay are everywhere. Manila is dotted with deserted, half-finished buildings, their bare girders rusting, and many factories are idled. There are more beggars and people surviving by selling flowers, newspapers and tobacco by the cigarette at traffic lights along the city's major avenues.
Tomas Uapal, 30, is probably a bit better off than they are. He has managed to hold part-time work as a driver, and on good days he can make a bit more than $5. With that he feeds and shelters a wife and three children. "We only think about how to live for tomorrow," he said.
Uapal said he never has had time to reflect on the causes of the crisis. But many of the Philippines' 55 million inhabitants have, and they blame it squarely on Ferdinand Marcos, the ailing oligarch who has been president for the past 20 years.
Although attention has been focused on the political impact of the 1983 assassination of opposition leader Benigno Aquino and its aftermath, the Philippine economy has been continuing its steep decline and is likely to be as important an issue in the special presidential election Marcos has called for February. Many analysts feel that it also figures prominently in the growing popular support that guerrillas in the Communist New People's Army have garnered in the past two years.
The crisis erupted after Aquino's assassination on Aug. 21, 1983. In ensuing weeks, angry demonstrators thronged the streets and Marcos settled in for a siege.
The black market blossomed, jittery depositors withdrew their money from banks and huge amounts of capital were transferred to havens abroad.
But the economy had been in deep trouble for years before that. While neighbors like Taiwan and Singapore prospered with export-oriented industrialization in the 1970s, growth in the Philippines was slower. The country remained inward-looking and dependent on commodity and semiprocessed exports for much of its foreign exchange earnings.
It has run up enormous foreign debt, currently totaling about $25 billion, even though its exports made it ill-equipped to service it. Some of that money reportedly was siphoned off into the personal accounts of businessmen and corrupt officials. Mismanagement of projects was widespread.
The turmoil following Aquino's assassination coincided with a serious downturn in world commodity prices and lingering effects of the 1979 oil shock. The collapse of world prices for some of the country's main exports, notably sugar, coconuts, copper and labor-intensive electronic equipment, has made a bad situation worse. The Philippines suddenly found itself a pauper in the financial world. In October 1983, it suspended payment on debt.
Gross national product actually shrank by about 5 percent last year. In the first nine months of 1985, official figures show, it declined another 3.3 percent against that period in 1984. When population growth is included, it means that on the average, Filipinos are about 15 percent poorer than they were two years ago.
Around the country, already ailing factories closed or laid off parts of their work force. Ford Motor Co. and General Motors, which made hefty investments in the Philippines in the 1970s, are among the many foreign companies that have shut their operations in the past two years. Construction projects were halted midway and exports sagged, further hampering the country's ability to pay its foreign debt.
This summer, official figures showed 7.3 percent unemployment. But they are widely dismissed as understating the true social costs of the crisis. By some estimates, as much as half the work force is underemployed, working less than half time.
After suspending foreign payments, the government began negotiations toward debt rescheduling with the International Monetary Fund, government lenders and about 480 private creditor banks. They worked out a $13.8 billion package of private and public loans as a means of keeping the country afloat into 1987.
The IMF imposed a far-reaching economic austerity program, its usual prescription for spendthrift debtor countries. It provided for control of the money supply, inflation and government spending, liberalization of import controls and exchange rates, elimination of price controls and other measures.
When a delegation from Peru, which has been at the forefront of a revolt in Latin America against IMF controls, called on Marcos recently at Malacanang Palace in Manila, Marcos praised the Peruvian initiatives on debt as courageous.
In general, however, Marcos has not tried to blame the IMF for the current squeeze, perhaps leading the public to focus more on him as the cause. Compared to Latin American countries, the Philippines has listened attentively to its instructions in hopes of restoring its standing by playing by the rules.
A big exception, however, has been in monopolies, particularly those controlling coconuts and sugar, two major export commodities. The IMF wants them dismantled and has turned off the credit tap at times to underscore its impatience.
The problem is that this goal strikes at the heart of what Marcos' critics call "crony capitalism," his habit of handing out rights to lucrative business and financing to a select group of friends and relatives. With both sugar and coconuts long established as "crony" commodities, many people say the government's reforms there can be only cosmetic.
Manila newspapers were filled last month with accounts of attempts by planter and businessman Eduardo Cojuangco, godparent to Marcos' only son and ranked as the "chief crony," to establish control over a body that is to replace the sugar monopoly agency.
In Washington Friday, international banking sources said a staff-level agreement had been reached to release approximately $115 million in loans from the IMF held up because of dominance over the sugar and coconut monopolies by Marcos' cronies. The IMF board is scheduled to meet this week and is likely to give final approval then, these sources said.
Marcos appears to retain strong popular support in many parts of the countryside. But the cities have become strongholds of dissent and cynicism during his 20-year rule, extending from the down-and-out unemployed to wealthy bankers and businessmen.
"The noncrony business community is totally opposed to him," said one American banker based in Manila. "You can't find anybody with good things to say about him." They oppose Marcos not because they are socialist reformers but because they find it impossible to do business with him in control. "If you survive and prosper," said the banker, "it's only because the boss wants you to."
A few local and foreign companies are expanding. (Government figures show a net inflow of investment capital from abroad of $39 million from January through August this year.) But most seem to be watching and waiting. No one is quite sure how the economy would work were the opposition to win the upcoming election. But many businessmen feel things could not be worse than they are now.
Opposition leaders make much of the charge that the country's woes are due to "crony capitalism." They contend that Marcos' associates have squandered billions in borrowed resources through outright fraud and embezzlement or mismanagement.
Government officials, however, focus on the two oil shocks of the 1970s and the decline in commodity prices, factors that the Philippines could not control. "We have just been hit earlier," said Adrian Cristobal, special assistant to Marcos. "The rest of ASEAN the Association of Southeast Asian Nations will follow suit."
By the government's account, meanwhile, the situation has bottomed out. "The system is still bleeding, but it's not bleeding as badly," said Planning Minister Vicente Valdepenas. Among the evidence: indications that this year's GNP contraction will be only 4 percent, against last year's 5.1 percent; growth in agricultural output; and the taming of inflation, which dropped from about 50 percent in late 1984 to near zero in recent months.