Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

426. Memorandum of a Conversation, Department of State, Washington, October 8, 1958¹

Washington, October 8, 1958

SUBJECT

• U.S. Military Assistance for Philippines

PARTICIPANTS

• Mr. Felixberto Serrano, Philippine Secretary of Foreign Affairs
• General Romulo, Philippine Ambassador
• Minister Manuel Collantes
• The Secretary
• Mr. Robertson, Asst. Secretary for Far Eastern Affairs
• Mr. Irwin, Asst. Secretary of Defense for Int’l Security Affairs
• Mr. Blick, Chief, Requirements Systems & Coordination Br.-Overseas
• Mr. Mein, Director, Office of Southwest Pacific Affairs

After a brief exchange on the Taiwan Straits situation the Secretary referred to his talk with Secretary Serrano in New York on September 27² when they had discussed the Philippine request for equipment for four divisions. The Secretary referred to his statement at that time that he was not familiar with the position of the Department of Defense and that he would discuss the matter with Defense upon his return to Washington. For that reason, he said, Mr. Irwin, Assistant Secretary of Defense, had been asked to be present.

The Secretary said that an important element in the picture is that there has been a very large build-up of U.S. power between the Philippines and the danger point, that is, Taiwan Straits, and that this constituted a shield for the Philippines. Also, as a result of the attacks against the Nationalist Chinese it has been necessary for us to use many of our assets to help the fighters on Taiwan. We proceed on the theory that we prefer to have the fighting take place as far away from our territory as possible and for that reason we have established a shield in the area. As a matter of fact we do not have many of our forces at home. We must, therefore, ask that the Philippine Government also consider its defenses not only in terms of what it has in its home territory but with our military strength in the area, which has been built up considerably, also in mind. He said that at the present time we have the strongest air and navy forces ever assembled in that area.

Mr. Irwin said that the objectives of the Department of Defense and of the Philippine Government are one and the same but that the problem is one of time and funds. In 1955 there was an agreement for the establishment of four divisions in the Philippines and for the modernization of the Philippine Air Force and Navy.³ During 1956–58 the Philippine budget had not been adequate to take care of the progressive build-up of the Philippine forces so that the Philippine Government had taken the position during that time that there was no urgency. Now, with the world situation being what it is, the Philippine Government evidently feels that there is some urgency. There are several factors, however, which must be considered: 1) The U.S. Congress cut back the amount of military assistance funds available and it is anticipated that we will have difficulty in obtaining sufficient funds from Congress this year. 2) The available funds have had to be used extensively in meeting the crises in the Middle East and the Far East. 3) The Philippine financial situation is not the best and the government is operating with a budget deficit. If we had provided as originally planned the Philippine Government would have required some $16 to $18 million more a year.

Mr. Irwin said that in order to assist the Philippine Government in a more rapid development of its military establishment we are prepared to take the following specific actions:

1. Expedite deliveries of the remaining 20 F–86F’s required to complete the second squadron, with arrival scheduled for the last quarter of FY 59. This would move the Philippine Air Force closer to its goal of three jet fighter squadrons.

2. Provide for the delivery of selected items of engineer, ordnance and signal equipment to the Philippine Army in FY 59.

3. Provide delivery of four coast guard patrol boats to the Philippine Navy in the 4th quarter of FY 59.

Mr. Irwin said also that without being able to give a commitment at this time we would hope to deliver in FY 60 six 155 Howitzers and 7 M-41 tanks for the Army. We will also consider financing the dollar cost of materials necessary to complete the construction of the training center of Laur, the airfield at Basa, and aircraft control and warning sites. One of the difficulties is that the U.S. had agreed to pay the peso costs of these constructions with the Philippine Government undertaking to provide the dollar costs of approximately $1.5 million. We have the impression that the Philippine Government because of its foreign exchange position cannot finance the dollar costs. We do not ourselves have the necessary funds and for that reason we cannot at this time make a commitment that we will undertake that construction. Mr. Irwin said that we would also consider delivering in FY 60 the 30 F-86F’s needed to convert to jet planes the third fighter squadron of the Philippine Air Force. He said there apparently is a problem involving a change-over from all-weather to reconnaissance planes.

All this, Mr. Irwin said, means an increase in cost of $25 to $35 million and there is a real question as to how this additional cost will be met. The Department of Defense appreciates the problem facing the Philippine Government and will do all it can to assist. He would emphasize, however, what the Secretary had previously said and that is that we have assembled in the Far East the greatest fleet ever brought together and that this in itself should be reassuring to the Philippines.

Secretary Serrano said that it is well known that the Philippine Government is having great economic difficulties. It is the hope of his government that the U.S. Government will help the Philippine Government in meeting its military requirements during this period. The Philippines would hope within a few years as a result of an improvement in the economic situation to be able to assume its share of the burden. He hoped that the U.S. would view the situation and the Philippine Government requirements sympathetically. Secretary Serrano wondered if it would not be possible, therefore, for us to agree to a progressive program which would enable the Philippine military authorities to plan on a definite basis. The Secretary suggested that Mr. Irwin put in a letter, which Ambassador Romulo could deliver to Secretary Serrano, the program contemplated by the Department of Defense as he had outlined it.

The Secretary said that we in the United States also have a very serious budgetary problem with a $12 billion deficit anticipated this fiscal year. He said that as Secretary Serrano could see we also have our problems so that we cannot do all we want. We don’t allow any problem, however, to stand in the way of being ready and willing to help our friends and allies to meet their problems of defense and security. We showed that in Lebanon and now in Taiwan. The Philippines, he said, can be assured we would be prepared to show it more clearly in their case since we have a special interest in them. The Secretary said we are strong and determined and we will see to it that the free world does not collapse because of military weakness. We cannot, however, afford to spend any money for our own or anybody else’s military requirements which are not imperative.

The Secretary said we were interested in the Communist Chinese statement that there is no place for the U.S. in the Western Pacific. The Chinese Communists want to dominate that entire area. This is a frank exposure of their intentions. We, however, do not intend to withdraw from that area as long as we have friends that want us to stay. We are not going to desert our friends and the power which we have assembled there should be reassuring to them. We will nevertheless try to develop within our budgetary limitations such a program as we can for the Philippine Government.

Secretary Serrano said that the Philippines fully realize the world commitments undertaken by the U.S. The present administration, however, faces domestic political problems and unless it can inspire confidence in the people that the U.S. is prepared to help the Philippines put its defenses on its feet it will be in serious difficulty. He said until the Philippines can straighten out their financial difficulties, therefore, it is necessary for the U.S. to assist. Mr. Robertson commented that he thought the speed-up outlined by Mr. Irwin should be of assistance to the administration in meeting this problem. In reply to Secretary Serrano’s question as to the amount of equipment involved Mr. Irwin said he did not have details at hand but it should not be overlooked that 20 F-86F’s is a great deal of air power. Secretary Serrano commented that the four patrol boats were actually only replacements. Mr. Irwin said he was not clear on that point but even if they were only replacements they would still represent a considerable gain in strength since they were new and had new equipment. Mr. Irwin said that the program had included a destroyer but he did not know whether such a ship was still available. He pointed out that inclusion of a destroyer in the program would increase the cost both to the U.S. and to the Philippines considerably. Secretary Serrano said that if the U.S. would be prepared to consider the inclusion of a destroyer, which would be of considerable morale benefit to the Navy, then the Philippine Government could at least on its own decide whether it wished to undertake the additional cost involved. Mr. Irwin said that he would inquire concerning this although he was not optimistic since we were trying to make available other items which would seem to have higher priority.

The Secretary commented that generally speaking, although no respectable nation wished to be entirely dependent on another, we must learn to rely upon each other and not try to maintain national military establishments of the magnitude necessary to meet all emergencies alone.

Secretary Serrano said he was leaving the U.S. tomorrow direct for the Philippines. The Secretary asked to be remembered to President Garcia. Secretary Serrano said the President had a very high esteem for the Secretary and for that reason he had asked Serrano to undertake personally the mission of discussing with the Secretary the Philippine desire for acceleration of its military program.

Ambassador Romulo asked what should be said to the press who would be waiting to see Secretary Serrano upon his departure. It was agreed that a statement would be prepared for the press. The attached statement was then prepared and later read by Mr. Lincoln White to the press.⁴

1. Source: Department of State, Central Files, 796.5–MSP/10–858. Secret. Drafted by Mein.
2. A memorandum of this conversation is ibid., Secretary’s Memoranda of Conversation: Lot 64 D 199.
3. The agreement relating to military assistance was signed by the United States and the Philippines in Manila April 27, 1955; entered into force the same day. (TIAS 3231; 6 UST 847)
4. Attached but not printed.