The Ideology of Austerity in 1950s Philippine Economics

Lisandro E. Claudio

The 1950s were a crucial period in the development of the Philippine economy. Most economic analysts have argued that the failed currency policy of the Central Bank during this period prevented the development of a robust manufacturing and export sector. This paper examines the economic thinking that led to the Central Bank’s policies through an intellectual portrait of its first governor, Miguel Cuaderno. It shows that Cuaderno’s thinking was informed by the ideology of austerity–a set of rigid anti-inflationary beliefs that would be considered “neoliberal” on today’s parlance. While political analysts have commented on the bureaucratic independence of Cuaderno’s Central Bank, few have paid attention to his ideas.

It also seeks to intervene in debates about Asian industrial take-off and the developmental state. In the 1950s, most economic analysts were predicting that the Philippines would be the next Asian country to industrialize after Japan. This paper will argue that the Philippines’ anaemic growth stemmed not only from the cliched reasons that commentators have used to analyze its underdevelopment: from cronyism to corruption. Rather, this paper contends that a rigid adherence to austerity as macroeconomic policy was the primary reason for the poor economic outcomes of the period.


Lisandro E. Claudio is assistant professor at the Department of South and Southeast Asian Studies, University of California, Berkeley. He is the author of Liberalism in the Postcolony: Thinking the State in 20th-Century Philippines, which won the George McT. Kahin Prize and Euroseas Humanities Prize in 2019.


The Asian Studies Association of Australia (ASAA) is the peak body of university experts and educators on Asia in Australia. Established in 1976, we promote and support the study of Asia in Australian universities and knowledge of Asia among the broader community. Our membership is drawn mainly from academics and students, but also includes industry and government Asia experts. We take a strong interest in promoting knowledge about Asia in schools and in contributing to state and Commonwealth government policies related to Asia. We provide informed comment on Asia to a broad public through our bulletin, Asian Currents, and specialist research articles in our journal, Asian Studies Review. Four book series published under our auspices cover Southeast Asia, South Asia, East Asia and Women in Asia.

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