The Long View: Paying for honesty

The Long View: Paying for honesty

by Manuel L. Quezon III

THIS Wednesday, it will be forty seven years since President Ramon Magsaysay died in a plane crash. Since his death, time and again, candidates have been compared to Magsaysay, But what Magsaysay is most remembered for, among the dwindling number of Filipinos who still remember him, is his fanatical honesty. I have read articles concerning his insistence on separating expenses incurred during his presidency which were of an official nature, and expenses incurred for his family while living in Malacanang. Newspaper and magazine accounts at the time detailed how the president instructed that meals for his children’s friends were to be paid for from his salary, and that gasoline for his son’s car was to be funded by deductions from the president’s salary as well.

In the present day, when the President of the Philippines earns 300,000 pesos a year, or 25,000 pesos a month, this seems inconceivable. This made me wonder if this was even conceivable in Magsaysay’s time. Or any previous president’s time.

I will leave it to Solita Monsod to embark on a more scientific study of what I am about to reveal, but I think the figures I’ve arrived at are as good a rule of thumb as any to arrive at what presidents actually used to earn.

Under the 1935 Constitution, the salary of the president was 30,000 pesos an annum. To figure out what, say, this amount circa 1937, would be worth in terms of today’s pesos, I asked the help of Jeremy Morales Barns, who is an economist and historian. Since we couldn’t find tables that calculate, say, the equivalent of a peso in the year 1937 if you received a commensurate amount today, we resorted to first, figuring out what pesos were worth then, in dollars, figuring out what those dollars would be worth in today’s dollars, and then converting those dollars to today’s pesos. If course this doesn’t take things such as the cost of living, both then and now, into account, but it’s a start.

From the time of the Commonwealth until the administration of Diosdado Macapagal, the peso-dollar exchange rate was fixed at 2 to 1. So whether in 1937 or 1957, the president’s salary of 30,000 pesos was equivalent to 15,000 dollars. To find out what 15,000 dollars earned per year in 1937 would be equivalent to, in terms of what the dollar can purchase today, economists apparently refer to a table of “purchasing power conversion factors” prepared by the U.S. government. For example, you take 15,000 dollars circa 1937, multiply it by 12.814 (the factor according to the table), and the amount you get is what those 1937 dollars would be worth in the year 2004. You then multiply that amount by the current exchange rate and you get an idea of what a certain amount in 1937 could buy you in 2004.

To cut a long story short, in today’s peso terms, the president of the Philippines circa 1937 was earning an annual salary of 12.814 million pesos! A cool million pesos a month in today’s peso terms. Based on the 1937 appropriations act, among the lowest paid people in the government, janitors, were earning 18,000 pesos a month in terms of 2004 peso equivalents. Still a decent salary.

Based on the different rates in that table, the following deductions are possible: in 1946, Manuel Roxas was earning as president, the equivalent of 9.43 million pesos a year; in 1957, President Magsaysay was earning the equivalent of 6.54 million pesos a year! At that salary, it is certainly believable that President Magsaysay could honestly instruct Palace accountants to deduct the expenses of his children for food and entertainment, gas and sundries, from his salary, and send them to good private schools (it also explains how his predecessor, President Quirino, and successor, President Garcia, could afford to retire to comfortable but far from flashy homes, located on fairly large but not enormous lots, after they left office).

President Ramon Magsaysay could afford to be honest and do what he did -be strict about spending for personal, and official, purposes- without it being improbable. His predecessors and succesors, who were less stringent about separating Palace expenses for their families, could certainly have achieved the amount of savings required to retire with a modicum of style and comfort.

This indicates, to me, the problem with relying on the sweeping assertions made about some of our leaders of the past. Magsaysay’s memory, in particular, has been used to justify all sorts of sweeping assumptions. Among these assumptions was that he was an American stooge, a charismatic moron, a fluke representing a break with the past.

Magsaysay was many things but he was neither an American stooge nor a clean break with political traditions before him. He was unabashedly pro American, yes, but he was that as a member of a generation that was pro American and he was not the creature of America that people like to assume (including the Americans themselves). A new generation of American historians are pointing this out. What is closer to the truth is that he represents the most successful case of the Americans appropriating someone else’s success and passing it off as their own accomplishment.

After all, it was under him that the retail trade nationalization act was passed, which the Americans positively disliked; he was the President under whom the Laurel-Langley Agreement was negotiated, which advanced the date for the end of the concessions granted to Americans under the Parity Amendment. Magsaysay was the President who insisted that the Philippine flag had to fly over the U.S. bases and threatened to send the Philippine Army to break down barriers that he felt were insulting to Filipinos traveling to and from those bases. While his rhetoric was pro American, he accommodated officials who were critical of American policies. This points to another sweeping assumption which isn’t true: that there was no difference between the Liberals and the Nacionalistas. The Liberals were more for unabashed free trade; the Nacionalistas were, indeed, as we understand nationalism, more nationalistic in their policies.
There is a concrete reason why Magsaysay was so admired, even loved, in his time, and it little to do with a marvelous success of American advertising or the gullible nature of the electorate. It had to do with who he was, and the people seeing this as something genuine, and not manufactured.

Manuel L. Quezon III.

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