Admiral John McCain and the unprecedented PH Dollar Remittance Program

(Part 1 of 3)

We were out of town on speaking engagements and attending meetings in the Middle East, South Asia, and last week in Seoul when the bemedalled and popular U.S. Senator John McCain, although unable to make it twice to the U.S. presidency, passed away from cancer, and was the object of unprecedented week-long ceremonies in Washington, D.C. fit for a genuine national hero.

His plane was shot down over Hanoi at the height of the Vietnam War and languished in prison for some five years, refusing to be freed, on account of his being the son of U.S. military commander while other American prisoners would remain in Hanoi.

Once we briefly met him with a handshake in the U.S. Senate with other U.S. Senators and we promised to call on him next time and purposely to lobby for Filipino Veterans Claims pending legislation in the U.S. Congress and to inform him of our close friendship with his late father, Admiral John McCain, Commander of the U.S Pacific Fleet, with headquarters in Honolulu, and his mother, now the 105-year-old Roberta. His father played an important role in the historic dollar remittance and official conversion program which we designed, initiated and pushed up to completion, and which killed the dollar black market and dramatically helped enlarge the Philippine foreign exchange reserves to what it is today at roughly 80 billion U.S. dollars, along with more dollars earned by Philippine exports. (After his retirement, Admiral McCain briefly joined the Board of our public company, Landoil and its subsidiary Philippine-Singapore Ports Corporation).

We were a 31-year-old minister and economic counselor in Saigon (now Ho Chi Minh City) during the Vietnam War. In Saigon, we, the small team of diplomats and staff, were receiving from the Philippine Department of Foreign Affairs our monthly salaries in dollar-denominated checks, which invariably were exchanged at the black market for local Vietnamese currency to pay for our monthly housing rental and costs of living in Vietnam. It was well known throughout Asia and in most capitals worldwide, that the black markets in foreign exchange were rampant.

At home at the time, the official peso-dollar exchange rate was at two pesos to one dollar but the black market was almost double and continued to deteriorate, and was everywhere, from the Escolta, then Manila’s main shopping area, to Subic Naval Base in Zambales, Clark Air Base in Pampanga, Sangley Point Naval Station in Cavite, Baguio which housed the U.S.-managed Camp John Hay, and Camp Wallace, in coastal San Fernando, La Union, also under U.S. operation.

At the time, if our memory serves us right, the total Philippine foreign exchange (dollar) reserves was hovering in the vicinity of $400-million, less than a billion, a miniscule, compared to our approximate foreign exchange reserves today of some $80-billion, including our intake from largely overseas labor remittances of some $25-billion to $30-billion a year.

From our diplomatic post in Saigon, we boldly proposed to the home government in 1966-67 that to throttle and eventually wipe out the black market in foreign exchange in the Philippines and elsewhere, and to dramatically and rapidly enlarge Philippine dollar reserves, that all U.S. military expenditures in the Philippines be officially exchanged at the Philippine Central bank at the official rate, to cover all U.S. expenditures in operating Clark, Subic, Sangley Point, Camp John Hay, Wallace Field, the peso requirements of the U.S. Embassy in Manila and other U.S. consulates and offices in the country.

Appealing to the Americans to support our plan, we turned Saigon into our operating center from where we flew to U.S. military bases across Southeast Asia and the Pacific, in between trips to Manila. For a number of these journeys, from Wake Island to Guam to Okinawa, we were permitted occasional rides in U.S. transport planes by Admiral John S. McCain Jr., father of the late Senator John McCain, and son of Admiral John Sidney McCain Sr., who commanded the Fast Carrier Task Force during the critical amphibious operations in the Pacific Theater in 1944-45 that led to the U.S. victory over Japan.

We developed a close bond with the Admiral McCain Jr., then commander in chief of the U.S. Pacific Command based in Hawaii that had operational control of U.S. military bases in the Philippines.

Once, while we were in Hawaii, we had a revealing conversation with the Admiral at the U.S. Navy headquarters at Pearl Harbor. The Admiral expressed the deep anguish he had felt every day as he made combat decisions while his son was being held as a prisoner of war in the Hanoi Hilton. We remembered the senior McCain worrying that his command decisions could cause harm to his son. He told us how difficult it was to separate his duties as a commander and his feelings as a father. The Admiral was worried that every attack on the enemy that he approved would cause his son to be mistreated or even executed in retaliation.

In hindsight, his concerns were justified. The Admiral’s son, the late Senator John McCain, suffered torture in North Vietnam. He was captured after his plane was shot down on October 26, 1967, and not released until March 14, 1973, when he was flown to Clark Air Base in the Philippines for medical care. This paternal purgatory lasted for five years. Admiral McCain became Pacific Commander in July 1968 and stayed in the post until 1972.

From Guam and Wake Island to Hawaii and Okinawa, we, as chairman of the Presidential Committee on Dollar Remittances, flew across the Pacific to drum up support for the dollar remittance proposal, and occasionally Admiral McCain would let us fly on U.S. military aircraft for these trips.

Sometimes we would go island-hopping to the Filipino communities in the U.S. bases with our team, co-chairman Labor Undersecretary Raoul Inocentes, Central Bank Foreign Exchange Director Alfredo Antiporda, and Philippine National Bank (PNB) officials Isidro Villanos and Pastor Alvarado, who were under PNB President Roberto Benedicto.

Without the generous and essential support from the Admiral at this key stage of development of the dollar-remittance program, the eventual success it enjoyed would not have occurred. To this day, the Philippines owes a debt of gratitude to Admiral McCain, as do we.

Thus did the dollar-remittance program go into motion with little fanfare, and with the splendid results the like of which we had not anticipated. A new social phenomenon had arrived as well. The overseas job market was beginning its rapid expansion by then, led by some of the brightest, most skilled, and ablest Filipinos, who left to work abroad with lucrative work contracts. This was a wholly new phenomenon – the mass export of skilled labor, the nation’s greatest resource – and its benefits were enormous.

(To be continued next week)

Hon. Former Speaker of the House Jose de Venecia Jr.
Hon. Former Speaker of the House Jose de Venecia Jr.

Hon. Jose de Venecia, Jr. served as Speaker of the House of Representatives of the Philippines from 1992 to 1998 and from 2001 to 2008, and is Founding Chairman, International Conference of Asian Political Parties. During his distinguished career, Hon. De Venecia was instrumental in successfully securing a peace agreement with the secessionist Moro National Liberation Front in southern Philippines and in forging a ceasefire and a peace pact with the rebellious Armed Forces group, RAM-YOU. He also revived the imperiled and long-stalled peace process with the communist National Democratic Front-New People’s Army, and progressed peace talks with the residual fundamentalist Moro Islamic Liberation Front (MILF) in Mindanao. Hon. DeVenecia is a member of GPF’s Global Leadership Council.

1 Comment
  1. Mr. de Venicia indicated that during the Vietnam War the peso-dollar rate was 2 pesos to 1 USD. I left the Philippines in 1967 in the early stages of the Vietnam War and the rate was already 4 pesos to 1 USD.

    Quoting Mr. de Venecia:

    “At home at the time, the official peso-dollar exchange rate was at two pesos to one dollar.”

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