ABSTRACT
After acquiring political independence from the United States in 1946, the Philippines
pursued industrialization as a national economic goal by instituting a program of import-
substituting industrialization (ISI) in the early 1950s. The ISI measures consisted mainly
of ‘controls’ a ban on imported finished products and a strict rationing of foreign exchange earnings (mainly US dollars). These measures were in response to a serious bal-
ance-of-payments crisis during the early post-World War II rehabilitation period,
19461949. However, the government, through the leadership of Central Bank Governor Miguel Cuaderno, used the controls to promote ‘new and necessary industries’ at home
(Ofreneo 1993; Constantino and Constantino 1978). The growth of these ISI industries
was rapid. By the early 1960s, the Philippines, as pointed out, was hailed by the World
Bank as second to Japan in Asia in the industrialization process, ahead of the Asian NICs.
A World Bank (1962) report summed up the changes in the 1950s as follows:
