Beyond Rhetoric: Revisiting (and Revising)
the Idea and Path to Economic Nationalism
the Idea and Path to Economic Nationalism
Introduction
The slogan “Filipino First” has long been associated with economic nationalism, a policy framework that prioritizes local industries and national self-sufficiency. However, its historical implementation has largely been rhetorical rather than structural. Instead of fostering genuine industrialization, it was used as a populist appeal while economic policies remained fundamentally dependent on foreign capital, multinational corporations, and the global trade system.
This contradiction has led to stagnation in the country’s economic development. While other nations, such as South Korea, Taiwan, and China, leveraged economic nationalism to build strong industrial bases, the Philippines failed to translate its nationalist rhetoric into a long-term strategy for industrial and technological growth.
This note argues that the failure of “Filipino First” lies in its misinterpretation and poor execution. Instead of being a strategy for national industrialization, it was reduced to a protectionist and anti-foreign rhetoric that did not translate into sustainable economic policies. Moving forward, a new approach is needed—one that balances strategic protectionism with industrial development, technological advancement, and global competitiveness.
The Failure of “Filipino First” in Practice
1. The Contradiction of Parity Rights and Economic Sovereignty
Despite the nationalist appeal of “Filipino First,” it coexisted with policies that maintained foreign economic control. The most glaring contradiction was the Parity Rights Amendment (1946-1974), which allowed U.S. businesses the same rights as Filipinos in exploiting the country’s natural resources and public utilities. This policy, inherited from the post-war Bell Trade Act, ensured that American firms continued to dominate mining, logging, and public infrastructure while Filipinos remained economically marginalized.
Claro M. Recto, a staunch advocate of economic nationalism, strongly opposed these policies, warning that they would trap the Philippines in a cycle of dependency:
“Political independence without economic independence is but an illusion.”
Recto's vision of "Filipino First" was rooted on self-reliance and national dignity. It was not about blind protectionism but abbout ensuring that Filipinos controlled key industries and create new ones rather than remaining dependent on foreign powers. He recognised that colonial economic structures felt the Philippines vulnerable to exploitation, and he argued for policies that would enable Filipinos to take charge of the country's development.
Alejandro Lichauco, another economic nationalist, echoed this sentiment, stressing that genuine economic independence required breaking free from an economic system designed to serve foreign interests rather than the Filipinos. He said:
"Underdevelopment in the Philippines is not an accident of history but the product of conscious policy that has kept the Filipino economy perpetually dependent."
For both Recto and Lichauco, the essence of "Filipino First" was not just about excluding foreigners but about empowering Filipinos by building industries, ensuring self-sufficiency, and creating an economic system that genuinely works for the people. However, despite their warnings, the Philippine government continued to prioritize foreign capital over domestic industrialization. The lack of investment in manufacturing and technological development left the country dependent on the export of raw materials—locking it into a neocolonial economic structure that persists to this day.
2. Protectionism Without Industrialization
One of the biggest flaws of “Filipino First” was that it focused on the call for protectionism without a parallel strategy for industrial development. Instead of nurturing industries to become globally competitive, the policy was used to justify the creation of monopolies controlled by a few elite families. Many of these businesses relied on government support and trade restrictions but failed to foster industries to innovate or compete internationally.
For example, the Philippine steel industry, despite being heavily protected, never reached the level of its counterparts in South Korea or Japan. This was due to a lack of investment in research, technology, and infrastructure. In contrast, South Korea’s economic strategy involved not only protecting its industries but also aggressively investing in technological development and industrial upgrading. The result was the rise of globally competitive firms like Hyundai and Samsung.
Economic protectionism without innovation leads to stagnation. Instead of using protectionist policies to nurture and modernize local industries, they were used as tools for crony capitalism and rent-seeking. This is why many Filipino companies remain uncompetitive in the global market, despite decades of state protection.
Ironically, foreign companies like Johnson & Johnson, Unilever-owned Philippine Refining Company, and Procter & Gamble-controlled Philippine Manufacturing Company took the path of import-substitution industrialisation, shifting companies from distribution, resource extraction (and small-scale manufacturing) to full-scale manufacturing.
3. The Misuse of Economic Nationalism by Oligarchs
Another major failure of “Filipino First” was its capture by oligarchs who used nationalist policies to enrich themselves rather than to develop the economy. Instead of creating a broad-based industrial economy that empowered the Filipino workforce, economic policies favored a small elite that controlled key industries.
This is evident in the monopolization of utilities, telecommunications, and energy sectors by a handful of powerful families. These industries remain inefficient and expensive for consumers, as they prioritize profit maximization over national development. In a true economic nationalist framework, these industries should have been developed into globally competitive state-owned or mixed-capital enterprises, similar to the models seen in Singapore and Taiwan.
Instead, the Filipino people were left with weak industries, high prices, and a lack of economic opportunities.
A New Approach to National Development:
Beyond Rhetoric to Genuine Economic Sovereignty
Beyond Rhetoric to Genuine Economic Sovereignty
A genuine Filipino First strategy must go beyond protectionism and focus on national industrialization. The failure of past economic policies stemmed from their reliance on populist rhetoric rather than structural transformation. To achieve true economic sovereignty, the Philippines must adopt an integrated economic framework that prioritizes agriculture, industry, science, and technology as the foundation of national development.
This paper outlines a strategic approach to national development that integrates sustainable industrialization, agricultural modernization, strategic foreign trade and investment, and technological advancement. By doing so, the country can move from dependency and stagnation toward a self-sufficient, globally competitive economy.
1. Developing Agriculture to Support Industrialization
A strong industrial economy cannot exist without a robust agricultural sector. Historically, the landlord-dominated economic structure stifled industrial growth by concentrating wealth in the hands of a parasitic elite, preventing agricultural surplus from being reinvested into industrial development.To break this cycle, the state must:• Implement genuine land reform to dismantle landlord monopolies and ensure land productivity serves national interests.• Modernize farming techniques through mechanization, irrigation, and scientific research.• Invest in rural infrastructure (e.g., farm-to-market roads, storage facilities, and food processing plants).• Redirect agricultural surplus to support industrial growth by supplying raw materials and creating a strong domestic market.
Increasing rural purchasing power expands the domestic demand for consumer and producer goods, driving industrial expansion. Industrialization should not come at the cost of food security—rather, the two must develop together in a mutually reinforcing cycle.
2. Encouraging Industrialization with Global Competitiveness
Protectionism alone is insufficient. Instead of simply shielding local industries from competition, there must be an active effort to develop industries through technology transfer, research and development, and infrastructure investment. Filipino First should mean the promotion of innovation, creativity, and continuous improvement, ensuring that local industries meet both national demands and global standards.To achieve this, the government must:• Provide state support for priority industries such as steel, electronics, and renewable energy.• Develop industrial parks and export processing zones to stimulate manufacturing.• Ensure access to capital for Filipino enterprises, particularly small and medium-sized businesses that drive economic growth.• Facilitate domestic and international technology transfer to accelerate industrial modernization.
South Korea, Taiwan, and China successfully combined protectionist policies with aggressive industrial upgrading. The Philippines must do the same—not by sheltering industries indefinitely, but by strengthening them until they can compete globally.
3. Strategic Foreign Trade and Investment
Trade and economic relations with other countries should be based on equality and mutual benefit, rather than dependency. The Philippines must abandon the colonial trade model, in which raw materials are exported cheaply while finished goods are imported at high costs.Instead, the state should:• Promote barter or counter-trade with countries willing to exchange goods and services rather than relying solely on currency-based trade.• Accept foreign investments and loans only when they align with national development goals, ensuring the least costly access to necessary technology, products, and markets.• Prioritize joint ventures with technology-sharing agreements rather than allowing full foreign ownership of key industries.• Implement strict investment guidelines that prevent foreign corporations from exploiting national resources without contributing to local economic growth.
Economic nationalism should not be confused with autarky (total economic isolation). True self-reliance does not reject foreign participation but ensures that it serves national interests rather than foreign dominance.
4. Advancing Science and Technology for Industrialization
No country has achieved economic independence without developing science and technology as the backbone of its industries. The Philippines lags in this area due to chronic underinvestment in research and development (R&D).To reverse this, the government must:• Allocate a significant portion of the national budget to R&D in both basic and applied sciences.• Upgrade existing indigenous technologies while adapting advancements from other countries.• Ensure an adequate supply of skilled and competent scientific and technical human resources through investments in education, particularly in engineering, manufacturing, and information technology.• Facilitate access to scientific research for enterprises, enabling businesses to translate innovations into practical applications for industry and commerce.Science and technology should be at the forefront of national economic planning, ensuring that local industries remain competitive in the global market.
5. Sustainable Industrialization and Environmental Protection
Industrialization must be pursued with due regard for environmental sustainability and the efficient utilization of the country’s natural resources.The Philippine government should:• Promote sustainable development by balancing industrial growth with environmental protection.• Implement strict pollution control measures to prevent environmental degradation.• Ensure that natural resources are conserved and utilized efficiently for long-term national benefit.• Develop renewable energy industries such as solar, wind, and hydroelectric power to reduce dependence on imported fossil fuels.A nationalist economic policy should integrate environmental sustainability into its long-term vision rather than treating it as an afterthought.
6. Preventing Cronyism and Promoting Meritocracy
Economic nationalism should serve the people, not the oligarchs. Past policies intended to support Filipino businesses were often captured by political elites, leading to monopolization, inefficiency, and corruption.To prevent this, the government must:
• Ensure transparency in economic policymaking, preventing policies from being influenced by elite business interests.• Hold businesses accountable for inefficiencies and corruption, ensuring that state-backed industries serve the national interest.• Promote fair competition to prevent monopolies and rent-seeking behavior.
A nationalist economy should be built on competence, innovation, and productivity—not on political favors and economic privilege.
7. Developing a Long-Term Strategy for Economic Independence
Rather than reacting to economic crises with short-term protectionist measures, the Philippines needs a long-term industrial strategy to ensure sustained growth. This includes:
• Creating an industrial roadmap that identifies priority sectors for development.• Establishing state-supported enterprises in strategic industries, ensuring national control over vital sectors like energy, transportation, and telecommunications.• Investing heavily in science, technology, and engineering education to build a globally competitive workforce.• Developing a strong domestic market that can sustain industrial growth, reducing dependency on exports.
The goal should be to transform the country into a manufacturing and technology hub, producing high-value goods instead of relying on raw material exports and overseas remittances.
Conclusion: From Rhetoric to Structural Transformation
The failure of past Filipino First policies was not in their intent but in their flawed execution. Instead of fostering self-reliance, these policies were hijacked by elites, monopolists, and rent-seekers, leaving the country with weak industries, an underdeveloped agricultural sector, and a persistent reliance on foreign capital.
To build a truly independent economy, the Philippines must:
1. Invest in national industrialization and technological advancement.2. Modernize agriculture to support industrial growth.3. Engage with foreign investments strategically, ensuring national benefit.4. Establish a meritocratic and corruption-free economic system.5. Develop a long-term plan for economic self-sufficiency.
Only by implementing these structural changes can the Philippines move beyond slogans and achieve genuine economic sovereignty. Filipino First must not just be a nationalist cry—it must be the foundation of a strong, independent, and prosperous nation.