Dominguez counters Marcos with history to debunk Masagana 99 'success'

MANILA, Philippines — History was not kind to Senator Imee Marcos during a Senate hearing on Wednesday. 

The hearing was meant to discuss the government’s handling of the coronavirus pandemic, but Finance Secretary Carlos Dominguez III briefly went off topic to debunk Marcos’ claims that one of her father’s pet projects, the “Masagana 99” was “effective” and successful. 

The diversion was prompted by Marcos herself, who while prodding Dominguez to muster a bigger government stimulus to assist farmers and informal settlers displaced by the outbreak, referred to the late dictator Ferdinand Marcos Sr.’s agriculture program.

Launched in 1973, Masagana 99 served as the Marcos patriarch’s program to increase rice production by offering highly-subsidized loans to farmers so that they can buy fertilizers and invest in equipment. The program’s name was derived from Filipino word meaning “bountiful” and the 99 sacks of rice targeted to be yielded per hectare at the time.

"During the Masagana 99 in the 70s there was also an effective use of commercial banks, rural banks and even cooperative banks and I believe that scheme would truly work," Marcos told the finance chief.

"However, perhaps we could consider enlarging the national government's stake even in that regard," she added.

Unfortunately for Marcos, she was addressing the question to Dominguez, who served as agriculture chief during the presidency of Corazon Aquino. Aquino succeeded Marcos, whose corrupt dictatorship got toppled by the people through a bloodless revolution in 1986.

“Ma'am, before we go ahead, you mentioned Masagana 99. I was the Secretary of Agriculture that cleaned up the mess that was left by Masagana 99,” Dominguez said.

“There were about 800 rural banks that were bankrupted by that program. We had to rescue them. So whether it's a total success or not, it has to be measured against that,” he added.

Marcos tried to rebut Dominguez by saying while her father’s program did not benefit the banks, it sure did facilitate Philippine rice exports. But the finance chief also debunked this: “We never exported, Ma’am.”

A failed program

In a 2012 study, researchers at the state-funded Philippine Institute for Development Studies noted how Masagana 99 failed to uplift the still-struggling farm sector as apart from leaving poor farmers highly indebted, their non-repayment of loans also tarnished the balance sheets of many rural banks. 

The impact was widely felt since at the time, Masagana 99 increased the proportion of agricultural loans to total bank loan portfolio to 50% from just 7% before the program was initiated.

Despite the program’s failure, President Duterte’s former agriculture chief, Emmanuel Piñol mulled copying the program in 2017 through Masaganang Ani 200 when rice stocks at government warehouses were depleting.

The plan, however, was overtaken by events, including the passage of the rice liberalization law which Piñol opposed, but was supported by Dominguez and other economic managers as a long-term fix to the rice shortage in 2018 that fueled inflation.

In July 2019, Piñol resigned from his post but was reappointed to the Mindanao Development Authority less than a month after.

Not the first time

Wednesday's clash between Dominguez and Marcos was not a first.

In April, as the government was scrambling to generate funds to fight the pandemic, Marcos pressed the government to request a change in its debt repayment timetable and use the funds intended for interest payments to beef up cash aid.

But Dominguez flatly rejected what he called was a “narrow-sighted” suggestion by Marcos, arguing that such an action could dent the country’s credibility among international creditors.