January 21, 1970
Have met (at 11:00 AM up to lunch and 1:30 PM) with Dr. Zavhkar of the IMF and Gov. Licaros and have convinced him that instead of a 25% devaluation a floating rate would be better to be set about the later part of February. But 75% of the export earning of the traditional exports of sugar, coconut, lumber, minerals etc should be sold to the Central Bank at P3.90 per dollar and the remaining 25% goes to the exporter and can be sold at the floating rate, so as to attend to his requirements. Then we can lift the import budget but we would have to keep credit restraints for the next six months. The Central Bank will earn $600 million which can be used by the public sector only after six months. We can now lift guarantees at a certain level provided they are at least for five years – specially for export oriented industries. We still must restrain travel, public spending and luxury imports. We must raise P600 million by new taxes. The strongest argument that apparently convinced him was the violence that might attend devaluation; the demand for increase of wages and salaries.
He is correct though that if we merely engaged in restrictions, the economy would be stagnant while the prices would go up anyway because of the reduction in production and imports. Then there would also be mass lay-offs in the factories.
Some unidentified persons have just time-bombed the Jusmag bldg. this morning. Only one PA Sgt. assigned there wounded but considerable damage to the building.
Looks like a 155 shell time fused in baggage compartment of a Vauxhall car parked close to the building.
This may be the beginning of a series of bombings.
Looks like leftists, activitists. Looks more like the Ma Maos.
And we received the news at 10:30 AM when I was awarding the Philippine Legion of Honor degree of Commander to Lt. Gen. Gideon, CF of the 13th Airforce. He goes to Dayton, Ohio, where it is 4 degrees below zero Fahrenheit.