July 6, 1945 Friday

Yulo continued to be very bitter against everybody. He has lost confidence in Osmeña and in Roxas in so far as our situation is concerned. As to MacArthur, he says MacArthur will do only what would be for his own convenience. He thinks Osmeña is useless. As to Roxas, he resented the fact that both of them journeyed from Baguio to La Union together, and then to Manila together, and afterwards, Roxas left him. Since then, they have not seen each other.

It is reported that Osmeña at one time planned to prevent the election of Roxas as President of the Senate. He wanted Yulo to return to make him his candidate for the position. This was never carried out.

It was also reported that Roxas had said that Congress had nothing to do and could do nothing in our case, and that it is only the military that could decide our case. This report depressed us. But the news was clarified by the letter of my wife. She said that she, accompanied by Mrs. Recto and Sen. Rodriguez, went to see Pres. Osmeña in his office. The President received them amiably. My wife went there to intervene in my behalf. The President told them that he cannot do anything now as we are still under the military, that he had already requested that we be transferred to the Commonwealth, and that once transferred he would be able to do something. According to her, Roxas paid her a call at our house. He said practically the same thing — that nothing can be done now, but that he has already asked Gen. MacArthur to turn us over to the Commonwealth. He would do his best for us, and if necessary he will go to America.

Today, news came that the military campaign in the Philippines had been declared closed. This may accelerate our transfer to the Commonwealth.

* * * * *

It seems almost definite that the elections will be held next November and that the opposing candidates will be Pres. Osmeña and Roxas. There is quite a difference of opinion as to whether it will benefit us or prejudice us. The general opinion seems to be that it will favor us. Recto upholds this view. They say that both will try to do everything for us with the expectation that we would help whoever could get us released. They are aware that we here hold the balance of power and that whoever we support will come out.

My opinion is different. I believe the effect will be just the reverse. Each would not be a candidate unless he is reasonably sure that he can win. They would be thinking: Why allow a new element to come in which may deprive him of his chance to win? Better eliminate any disturbing element. On the other hand, there are many candidates for senator who will try to use their influence not to allow us to be released for fear that we may present our candidacies and therefore lessen their chances to get elected. Furthermore, each candidate will want to be sure of our support. Those will not get our support will surely work against us.

Both Osmeña and Roxas can do very much for us either way. Osmeña will be the one to decide what to do with us once we are turned over to the Commonwealth. On the other hand, Roxas is an intimate friend of MacArthur and just now our fate is in the hands of MacArthur. If, on the other hand, because of our prudence and because we do not want our attitude known just yet, both may lose interest or may want us to remain where we are until they find out how we stand.

We have been informed that the most serious charge against former Ministers of the Philippine Republic is that we left Manila and this resulted in the killing of so many residents of the city. In other words, they say that if we had not left Manila, the massacre of residents would not have occurred. I am sure that our presence in Manila would not have made any difference. This is what the Japanese did throughout China before the establishment of the Pro-Japanese government. The Japanese were aware that the majority of Filipinos were against them. To protect our people and ourselves, we of course denied this. But as a matter of fact, we knew positively that 95% of the Filipino people were anti-Japanese. We knew that even the government employees serving in the Japanese regime were “guerrilleros”. We knew the feeling of the Filipinos because we were in continuous close contact with them. They hated the Japanese. This feeling was prompted by the abuses committed by the Japanese. They also resented the intervention of the military police and Japanese civilians in strictly private affairs.

What the Filipinos resented most was the air of superiority assumed by the Japanese. Even those holding the lowliest jobs acted no more, no less than kings. All branches of government had Japanese advisers, some of them very ignorant. They would give orders to Filipino officials who by education and experience were far ahead of them.

I remember the case of Dr. Sison, Director of the Philippine General Hospital and Dean of the College of Medicine, reputed as one of the best doctors in the Philippines. A young doctor in the Japanese Army with the rank of Lieutenant, a Dr. Ono, tried to boss him around. We had a Japanese friend, Mr. Yamamoto, then Manager of the Yokohama Specie Bank. We were with him almost everyday as he was a member of the Philippine Club and we used to play tennis with him. After the Japanese occupation of Manila, he would not even talk to us.

We interpreted the attitude of the Japanese as a superiority complex. This we can never accept. Just as we have been preaching that we must have no inferiority complex towards the Americans and other whites, we cannot under any circumstances admit inferiority to the Japanese. Such is the general feeling of Filipinos toward the Japanese and they knew this perfectly well. This is the reason why they tried to change the government, why they wanted Gen. Ricarte and Benigno Ramos to hold responsible positions in the government; why they organized the Makapili, which constitutes not only an army to fight with the Japanese, but a party openly and aggressively for the Japanese. They were against the Laurel government because they were convinced that all of us were not sincere. On the other hand, they knew perfectly well that in Manila and everywhere else, there were many “guerrilleros” and that the moment the Americans approached Manila the Filipinos would all rise up in arms. Under the circumstances, it was not surprising that they had decided to kill everybody they saw before retreating. We could not have done anything. All that would have happened is that they would have killed us also; they did not discriminate. Even those who were reputed to be pro-Japanese and who had done much for the Japanese were killed.

Supposing that we could have done something, why did we leave Manila. We did not want to leave Manila. Plans to evacuate Manila had been previously considered. Various places were considered for the purpose, like San Mateo and Montalban. After due consideration, however, we decided to drop the matter of the proposed evacuation. But on the 19th of December, the President called us to a special meeting and told us that we were being ordered by the Japanese Military authorities to go to Baguio. We were all surprised. Baguio was one of the evacuation places considered and there was almost a unanimous vote against it for two reasons: (1) There were only two roads leading to the City. If these were cut off, not only would it be impossible to escape but there would also be a food shortage since Baguio is far from being self-sufficient. (2) The water supply of Baguio comes from a pumping water system and if the water lines or the pumping mechanism were destroyed or ran out of fuel, we would have a big problem with our water supply.

At any rate, we had decided not to leave Manila. We asked the President whether we could stay. He answered that he had done all he could to prevent the evacuation since he felt duty was to stay in Manila. He feared that there would be a panic when the people found out that the national government had left. He desired to be in a position to protect the people, to die if necessary. Of course that was also the sentiment of each and every Minister. The President said we must go.

We were given 48 hours to leave Manila. For this reason, I was not able to clear out my desk. My family had no time to prepare for departure. I left many things that I should have taken. At home, we packed hurriedly, also leaving many valuable things behind. We were not able to make arrangements for the occupancy of our house during our absence. We had to ask my daughter Lily and her husband to stay there in the meanwhile. The newly married couple, my daughter Neny and Ramon Cojuangco, could not go to Baguio with us because the younger sister of Ramon was doing to be married in a few days. They promised to follow us as soon as possible. (They failed to do so and I suspect it was because of lack of transportation or because American planes were hovering all over Luzon and it was not safe to travel.)

Our car was not ready for the long trip; it needed to be brought to the repair shop. We were told that we would leave for Baguio at ten o’clock of the night of the 20th. Our car was finished at about 9 o’clock of the night set for our departure, but it did not run smoothly. A Malacañan mechanic, after inspecting it, told us that the car could definitely not reach Baguio. I decided to take the armored car of the Philippine National Bank where I was the one-man Board of Directors. But the armored car was hardly sufficient to accommodate our cook, laundry woman and servants, not to mention our luggage. Not including our household help, we were thirteen: my wife and I, my eight children, mother-in-law, my Japanese military police guard and my chauffeur. We tried to get other cars in Malacañan, but they were all in bad shape and the mechanic certified that they could not reach Baguio. In a way, we were glad as we thought that it would be a good excuse for us not to go.

The Japanese offered to give us a military car, but of course I did not want to use such a car because it was painted in the special khaki color of all military cars. It would have been very dangerous since American planes seem to have already mastery of the air and I was sure that we would encounter American planes. The military car would be a target. I decided to borrow the Buick 7-passenger car of my son-in-law, Ramon Cojuangco (1941 model), although it had not been used for months and we were not sure that it would run. When we tried to leave the Malacañan Palace grounds to go to the house of Speaker Benigno Aquino where the car was kept, the Japanese guards stopped us and questioned us repeatedly. When they found out who I was and where I was going, and that my sole purpose for leaving the premises was to get my son-in-law’s car to use in going to Baguio, we were allowed to leave but under guard. Speaker Aquino’s house was within hailing distance from Malacañan.

The Buick would not start. We pushed it to start the engine, and finally after two hours of pushing, the car began to function. All the while we were pushing the automobile, the soldiers followed behind us. Back in Malacañan, the mechanic certified that it could reach Baguio, so we decided to use it.

We arrived in Malacañan before ten o’clock, the time for departure set by the military, but we were not to leave for Baguio until the next morning. No one was allowed to leave Malacañan. That night we slept on divans and chairs, and some slept in the cars. We were not allowed to get food from the outside; we had to be contented with the little food furnished us by Malacañan. The palace was very heavily guarded by Japanese soldiers and officers.

The motorcade consisted of at least 30 cars belonging to the President, the Chief Justice, and all the Ministers with the exception of Minister Sison of Home Affairs. The Japanese Ambassador and his staff were also with us. Alongside the car of each Minister was a military vehicle with Japanese guards in full uniform. We noticed that they kept their eyes on us.

We boarded our automobiles at about seven o’clock in the morning. We were given instructions. The cars were camouflaged and divided into groups. Each group would leave at half-hour intervals and each car was to keep a certain distance from the next. When American planes appeared, we were told to alight and endeavor to find an air raid shelter, or go to a more protected place like under trees, and not to move. We knew that the trip was going to be a dangerous one. I was worried as I was carrying about ₱15,000,000 of military notes and about ₱1,000,000 of Commonwealth notes in the armored car owned by the Philippine National Bank which was part of our caravan.

We did not actually start until about 9 o’clock and so we were inside the car sweating for a full two hours. The Kempetai or military police assigned to me sat with the chauffeur and was fully armed. We took the regular route to Baguio. There was very little civilian traffic or Filipinos on the road. All along the way, the roads with the exception of places inside the “poblacion” were deserted. Almost all the houses were vacant. The atmosphere was very pitiful and sombre. We also saw no animals. There were stretches of miles and miles with no Filipinos in sight. They probably had fled to the mountains or to the barrios to avoid the Japanese soldiers who had been taking all their food. There were many Japanese soldiers, automobiles, trucks and other military vehicles all along the way. It convinced us that there were still many Japanese soldiers in the Philippines. What we could not understand was that the soldiers were travelling in both directions. We saw cannons, especially anti-aircraft. We saw various airplanes parked alongside the roads, very well camouflaged.

Before leaving Manila, we were told that signals would be given whenever there was an air raid or American planes above. I forgot to say that our convoy included many trucks of Japanese officers and soldiers. Generally, there was one truck in front of a group and another behind. Because of these trucks, we travelled at a very slow pace. A kilometer before reaching San Fernando, Pampanga, we were stopped. We were advised that Camp Clark, the most important Japanese air base, was being attacked. We got off to run for shelter. I selected a ditch. We saw two American planes overhead. We certainly were scared. Evidently the planes did not see our cars as they continued on their way.

We proceeded on our way. San Fernando was intact, but when we reached Angeles we saw that the town was almost completely wiped out. It is said that it was burned by Communist elements. We reached a place from where we could see Camp Clark; a few places were still burning. We learned that many Japanese planes were either shot down or destroyed on the ground. There were also some American planes hit. We learned that Pres. Laurel and his family, who were in the first group, were very near the scene of the air battle and bombing. They also had to alight and hide.

When passing Tarlac we saw many planes coming. At first we thought they were American planes, but they were flying low. Evidently, a big transport carrying some high Japanese officers, was being escorted. The rest of the way we did not stop. We tried to go as fast as possible when approaching or passing airports and other military objectives. We did not encounter any more planes.

Alcohol fuel is really far from being as good as gasoline. All along the road cars belonging to different groups stalled. Many had to be pushed or’ repaired. Some cars had to be abandoned on the roadside, the occupants transferred to the military trucks with the Japanese and Philippine Constabulary soldiers. After a few hours, the motorcade broke up as most of the cars had stopped. The cars still running went ahead. All along the way the trucks loaded with Japanese soldiers never left us. When our car stalled, they also stopped and helped push our car. No car was able to arrive in Baguio before dusk. Some arrived before midnight of the 21st and some in the early morning of the 22nd. Some even arrived on the 23rd. Many cars were left behind. The occupants of cars that broken down in Kennon Road walked all the way to Baguio.

My family and I had the most sensational experience. My car ran smoothly until we entered Pangasinan when it stopped. It had to be pushed by Army trucks quite a long way before it would start again. This had to be repeated many times. At one point, the machine would not function anymore. A Japanese mechanic alighted from a truck and repaired the machine. He must have been a good mechanic as the machine started and we continued on our trip. After about 20 kilometers we stopped again. A truck tried to pull us with the intention of doing so up to Baguio. But my car was very big and heavy and it could not be pulled up the mountain road. The mechanic was able to make it function again. After stopping in Pozorrubio for fuel, at about six o’clock in the evening, we started the sleep climb to Baguio. Before reaching Camp one, the car stopped again. It had to be pushed for kilometers by Min. Recto’s car. In places, the roads were so narrow after a landslide; the fender skirts caught a high ground and the car got stuck. We removed the fender skirts but were convinced, however, that we could not continue the trip that way. Meanwhile, many cars had accumulated behind us and the occupants were becoming impatient. I heard them hooting. I was annoyed; I thought they ought to be more helpful. I told the chauffeur to stop the car, park it on the side of the road, and allow all the cars, including the one pushing us to pass. I was determined that we would sleep right there on the road. It was certainly difficult for my mother-in-law, my wife and my children. I could see that they were suffering, especially as it was already very cold. I was not sorry to stay; I was afraid to continue. My chauffeur had been rejected by the government insurance company for poor eyesight. He was also color blind. I should not have allowed him to drive, especially on narrow and dangerous roads like the Kennon Road. But the chauffeur continued to work on the car. Finally, to our amazement, it started to function.

By this time we were the only car on Kennon Road. We went quite fast. We could not slow down because everytime the car slowed down it would stop. We continued our way in quite a fast clip. We passed all the cars that hours before had left us. We reached Baguio several hours ahead of them. My chauffeur had never been to Baguio. So I had to direct him. We intended to go straight to the house reserved for us in Cabinet Hill. The road to Cabinet Hill was closed. We went ahead to the Pines Hotel. There we learned that the houses on Cabinet Hill were not ready since the present occupants had been given only a few days to vacate the houses — accommodations in Baguio were then very difficult. But the Pines Hotel was ready for us.

My chauffeur, who had never been to Pines Hotel, did not know the correct entrance. He entered through the exit. Since the driveway was very narrow which made it difficult for a car to back out, I walked to the hotel lobby where I got permission for us to approach the front entrance passing through the wrong way. From the entrance, I hailed my chauffeur to start the automobile and proceed. The road was steep and the car began to roll down, I was right in front of it. I hardly had time to jump out of the way. It was a narrow escape.

We went into the hotel. There was no food prepared for us so we passed the night hungry. We were given two small rooms where we had to sleep four to a bed. We suffered terribly.

I relate all these facts to show that we did not want to leave Manila voluntarily and that we were carried by threat and by force to Baguio.

I would also like to relate here the circumstances connected with the ₱15,000,000 of military notes and ₱1,000,000 of Commonwealth notes that we brought to Baguio.

Sometime on December 19, 1944, the Japanese adviser of the Ministry of Finance, Mr. Haraguti, accompanied by three Japanese officers, came to see me at my office. I was surprised at the sudden arrival of my visitors for I had not been informed of their coming. Haraguti, in the name and on behalf of the Japanese Army, demanded that all Philippine and American currency deposited and in the possession of the different Filipino banks be turned over to the Southern Development Bank, a bank owned and controlled by the Japanese government. As Minister of Finance, I had the sole discretion of affecting such a transfer with the final approval of the President. The Japanese did not go to Laurel directly because, in many previous occasions, Laurel told them that where money matters were involved he executes whatever his Minister of Finance recommends.

I protested vehemently. Haraguti cited a precedent — what the American High Commissioner did with reference to bank funds upon the commencement of the Pacific war. He said that the High Commissioner took possession of all the Philippine currency belonging to the different banks. I answered that the present case is different inasmuch as the Philippine Commonwealth was really under the American government, whereas at present the Philippines is an independent Republic formally recognized by the Japanese government. Haraguti insisted and I could see that the Japanese were determined to use force if necessary. I then asked him why they wanted to get the money. He answered that the purpose was to prevent their circulation. I then proposed that the Republic get the money for safekeeping. I added, however, that I would consult Pres. Laurel before making a definite decision. I thought they had accepted my proposition as they left without saying anything further.

I immediately went to see Pres. Laurel. I told Laurel that I was convinced that the Japanese were hell bent on confiscating the money and that we had no other recourse but to do all the means necessary to save the money. Pres. Laurel and I decided to meet with the managers of the banks concerned. Whatever is agreed upon by the managers and myself, would be considered as approved and ordered by the President.

The following day, I called the bank managers concerned and met with them in the office of the President of the Philippine National Bank on the Escolta. As I recall, the only banks then having Philippine or American currency were the Philippine National Bank, the Philippine Bank of Commerce, and the Bank of the Philippine Islands. The PNB was represented by Mr. Vicente Carmona, as bank President, while PBC and BPI were represented by their respective Vice President and General Manager, Miguel Cuaderno and Rafael Moreno. Felix de la Costa, director of the Bureau of Credits and Investment, was also present.

During the meeting I gave them an account of what happened. I told them that the only possible satisfactory solution would be for them to turn over the money to the Philippine government for safekeeping. I added that the money would be returned to them as soon as conditions become normal. They all readily agreed. With respect to the Philippine National Bank, no action was necessary as we were leaving all the money with the bank. I issued corresponding receipts to the banks for the amounts received as follows: Philippine National Bank, ₱490,529.00; Philippine Bank of Commerce, ₱425.200.00; and Bank of the Philippine Islands, ₱969.00. The total amount taken by my office was left and deposited with the Philippine National Bank. After leaving the bank, I went directly to Pres. Laurel to give my report. He approved all that had been done.

About a week prior to the above-mentioned events, Malacañan had advised all the Ministers that the Japanese were ordering all of us to go with them to Baguio. On December 20, 1944, an arrangement was made with the Philippine National Bank to load all the currency in the bank’s armored car which would go with us to Baguio. The person in charge of the armored car was Mr. Amado Lagdameo, the manager of the Baguio branch of PNB. Upon arrival in Baguio, the money was taken directly to and deposited in the Philippine National Bank branch.

In the evening of January 8, 1945, I received a letter from Manager Lagdameo reporting that Maj. I. Moritani accompanied by the Managers of the Bank of Taiwan and the Nampo Kaihatsu Kinko, forced him to hand over to them all the notes deposited in trust with the branch. Also taken were all the cash in the vault. He also wrote that he was not allowed to communicate with me by phone nor see me personally.

I immediately reported the matter to Pres. Laurel. I told him that what the Japanese had done was clearly illegal and improper. I recommended that Laurel make representations to the proper Japanese authorities immediately for the return of the currency seized as it was being held in trust by the Philippine Republic for the banks. Laurel protested strongly to the Japanese Ambassador and the Japanese military authorities demanding the return of the money. Up to the time when I escaped from Baguio on April 12, 1945, the money had not yet been returned. All that we were able to get was a receipt for the money from Col. Utsonomiya. All the original documents are in my possession.


17th January 1945

The Japanese financial adviser in Manila has given us a few graphic flashes of the last days of the Laurel regime in that city. Its government, he said, had ceased to exist for all practical purposes. It could not collect one centavo in taxes; the collector of internal revenue had himself fled to the provinces on the excuse of bad health; the government was living on 50 million yen borrowed from the Nampo (Southern Development) bank against the 200 million credit granted last year by the Bank of Japan. Nor could the government exert its authority outside the city borders of the capital. Orders to provincial governors could be delivered only through the Japanese army. The governors of Bulacan, Rizal, and Pampanga, summoned to Manila to receive instructions, had disappeared on the way back to their posts.

The people were starving; about 200 died of hunger every day. Rice was so scarce that when the Japanese garrisons went out to wash their messkits at roadside faucets, hundreds of Filipinos would gather around them, shouting “service” (one useful English word the Japanese had picked up), and waving thick wads of military notes for which they wanted only the pathetic privilege of washing the mess-kits and scraping together the few grains of rice left in them.

The Japanese, of course, know nothing of the horror they have wrought. They believe their newspapers which picture the Filipinos as grateful to the Japanese and ready in this hour of trial to fight at their side. They themselves, poor devils, are not better off. It is just as difficult to blame them as to pity them.