Philippine President Corazon Aquino today told Secretary of Defense Caspar W. Weinberger that her new government needs American economic aid more than military assistance and that a Communist insurgency here can be defused by boosting the economy.
The visit by Weinberger, the highest-ranking U.S. official to call on Aquino since Ferdinand Marcos was ousted in February, was intended primarily to show American support for the new government, U.S. officials said.
[In Washington, Philippine Finance Minister Jaime V. Ongpin said his country needs an immediate infusion of U.S. and multilateral aid to avert a financial crisis that would undermine the new government, Washington Post staff writer Don Oberdorfer reported.]
About 75 leftist demonstrators heckled Weinberger and his party as they entered and left the Malacanang presidential palace grounds. But there were no serious incidents, and neither side mentioned the heckling in the talks, officials said.
Earlier, Weinberger met with Defense Minister Juan Ponce Enrile; the armed forces chief of staff, Gen. Fidel Ramos; and other Philippine military officers. Members of a military reform movement sat in on their meeting at the Defense Ministry, officials said.
Weinberger stopped in Manila for a day as part of an Asian tour, then flew to Thailand, where he is scheduled to visit the Thai-Cambodian border. He will also visit Australia, where he is to discuss regional security arrangements.
Weinberger, speaking at an airport news conference before flying to Bangkok, said that the Reagan administration wants to help the Aquino government as much as possible, although the Gramm-Rudman-Hollings statute may limit new aid. He said, however, that "there's a very good chance in Congress of securing approval" of aid. He would not discuss specific amounts.
For the current budget year, Congress has authorized $55 million in military assistance and $125 million in economic assistance to the Philippines. For the 1987 budget year, the administration's request is for $100 million in military aid and about $80 million in economic aid.
"I think there will certainly be a strong infusion of economic aid," Weinberger said in response to a question on what kind of assistance the United States would provide. But he added, "I think that it's necessary to have some military assistance to continue with the reorganization, strengthening and modernization of the Philippine armed forces."
He said he expressed to Aquino "our feeling that in many cases it's essential to have both, although certainly the emphasis has to be on economic aid."
A spokesman for Aquino said she expressed appreciation for the U.S. show of concern and stressed that "what is really needed is more economic aid," especially assistance aimed at providing jobs to ease the current high unemployment, estimated at up to 20 percent.
The spokesman, Rene Saguisag, said the "bad news" conveyed by Weinberger was that the Gramm-Rudman-Hollings act "stands in the way of the kind of massive aid the Philippines needs." But he said the talks produced "an air of optimism that the supportive attitude of the U.S. Congress could be translated into dollars and cents."
The Philippine economy currently is struggling under a $26 billion foreign debt, a budget deficit that could balloon this year to $1 billion, a 50 percent underutilization of industrial capacity and a growth rate of the gross national product projected at less than 2 percent, according to official statistics. Finance Minister Ongpin said last week that up to 70 percent of the population lives below the poverty line -- defined as family income of about $140 a month.
Saguisag said the Communist insurgency, which grew during Marcos' 20-year rule from a handful of fighters to a nationwide force of about 16,000, "is basically a sociopolitical problem." He added, "If the economy can be improved meaningfully, the insurgency threat can be dissipated."
Weinberger told reporters that he gave Aquino a letter from President Reagan warmly congratulating her on her accession to power in a military-led popular revolt Feb. 25. Weinberger expressed "great admiration for the way in which the revolution has succeeded, the way in which freedom has been returned to the Philippines."
Oberdorfer also reported the following from Washington:
Finance Minister Ongpin, beginning a week of meetings with U.S. and international finance officials in Washington, said $100 million in emergency U.S. economic assistance being discussed by the Reagan administration and $580 million in multilateral and commercial bank loans are essential. "We are in an emergency situation," Ongpin said at a breakfast meeting sponsored by the Carnegie Endowment for International Peace.
Ongpin said that the six-week-old Aquino government could not meet all the conditions that previously had been accepted by the Marcos government for disbursement of $230 million in International Monetary Fund loans and $350 million in loans from U.S. commercial banks. But he expressed hope that this money will be released to the Philippines because of its "very special situation," and he said that failure to do so would bring about an early "foreign-exchange crisis."
Such a crisis "would undermine not only the economy, but the new administration," Ongpin said.
The U.S. Executive Branch is also planning to ask Congress for $50 million in emergency military aid to the Philippines. Ongpin said that these funds might help "alleviate the need" for some military spending by the hard-pressed Aquino government. Moreover, he said the Manila government hopes that a negotiated peace with the communist-led rebels would make possible "very substantial" reductions in spending for waging the guerrilla war.
In answer to questions, Ongpin said special audits had shown that past U.S. economic aid to the Philippines had not been misused, despite some reports to the contrary.
Part of the "very gloomy" economic situation at present, Ongpin said, is due to overspending by Marcos early this year in a "futile attempt to buy an election victory." The actual Philippine government budget deficit for the first quarter of the year, he said, exceeded the deficit that had been forecast for the entire year.
While "political liberation" from Marcos was speedy, Ongpin said, "our economic liberation is going to be long and hard." He said a reorientation of government corporations to the private sector, which he advocates, "doesn't offer a magic quick fix."
"It is not enough to applaud us -- you must help us, too," Ongpin said.