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The transition government ended in 1945, the same year that World War II came to an end.

On July 4,1946, the Third Philippine Republic was inaugurated at the Luneta in Manila. Hundred of thousand of Filipinos and some American and foreign dignitaries witnessed the ceremonies.

Among the distinguished American guests were General Douglas MacArthur, supreme commander of the Allied Power in Japan; General Millard Tydings, co sponsor- of the Philippine Independence Act; and former Governor General F.B. Harrison, the most beloved American governor-general in the Philippines.

The most meaningful and solem moment of the independence ceremonies was the raising of the Philipines flag by President Roxas and the lowering of the American flag by Ambassador McNutt to the accompaniment of the national anthems of the two nations. At this significant moment in the history of the Filipino nation, church bells throughout the Philippines were rang to announce the freedom of the Philippines. After the flag ceremony, and Vice-President Elpidio Quirino again took their oath of office, this time as president and Vice-President of the third Republic of the Philippines. Thus Roxas was recorded the last President of the Commonwealth and the First President of the Republic.

To rehabilitate the Filipino who suffered war damage, U.S. Senator Millard E. Tydings sponsored the Philippine Rehabilitation Act. It appropriated $620 million to be paid to the Filipinos who suffered.

In Exchange of the U.S. aid to rehabilitate the Philippines, the United States gave one condition: that the Philippines grant parity rights to Americans- equal rights with Filipino citizen to develop and exploit natural resources of the Philippines and to operate public utilities in the country. The Filipinos had no choice but to amend the constitution to grant parity rights to American citizens in exchange for U.S. economic aid. The parity rights amendment was ratified on March 11,1947.


Economic Problems

The war brought losses to the Filipino nation in terms of physical and human resources. According to 1951 government report, the total war losses of the Philippines encountered to more than $8 Billion. This included the value of the public and private property lost and destroyed in the war, the precious lives of the Filipinos devastated by the war, and the cost of goods and services that the Japanese took from the Filipinos without payment.

The war adversely affected the trade and commerce of the nation. Many factories and offices were destroyed or heavily damaged. Many Filipinos lost their jobs. The problem was too big for the Philippines to solve. It did not have the money and other resources to bring back life to industry and to the economy.

Graft and Corruption

The second Republic was also saddled with graft and corruption in the government. This phenomenom blocked the economic recovery of the nation. Many government officials were not true to their commitment. They took advantage of their position to enrich themselves in office. They connived with unscupulous businessmen who wanted to get rich at the expense of the Filipino people.

There was the war surplus scandal involving the disposition of U.S. Surplus war materials such as jeeps, trucks, and others that the United Staes turned over to the Philippines as aid. The Filipinos did not benefit from this aid because surplus materials were either stoled or sold to favored buyers. Another scandal involving some congressmen was the practice of helping many illegal Chinese immigrants to stay in the Philippines in exchange of large sums of money. These were called " under-the-table" transactions. There were also reports on the scandaous purchases by government textbooks and other supplies and equipment at exorbitant prices with "kickback".

Another scandal was the extravagant trips of many government fficial abroad at government expense. The rampant graft and corruption which was never checked made the Filipinos lost their trust in the Government.

Magsaysay's Charisma as a Leader

Ramon Magsaysay became President in 1953 on the strength of the vote of the Common tao- the masses. True to his promise, Magsaysay hard to improve the status of the masses, he geared his administration to the urgent demands of rural improvement.

As a step toward the realization of his development goals, Magsaysay had Congress pass the Agricultural Tenancy Act in 1954 which provides for a greated protection to the tenants by granting them the freedom to choose the system of tenancy under which they would want to work. The implementation of this Act was accomplished with the establishment of the Agriculture Tenancy Commision and the Court of Agrarian Relations whose main function is to settle satisfaction and promptly all tenancy disputes.

During the first year of Magsaysay's administration, 28,000 land patents covering 241,000 hectares, were issued to settlers/landless. The following year the number increase to 33,075. Agriculltural lots were distributed to landless applicants. It was during his barrio-to-barrio campaigns that he realized, as nobody in the government realized, the plight of the "taos" who lacked the necessary leadership to make their voices heard.

It was during the Magsaysay administration that the Philippines sucessfully negotiated the RP-U.S. trade Relations that culminated in the signing of the Laurel-Langley Trade Agreement of 1956. It was also during Macapagal's term that Japan agreed to pay war reparation to the Philippines over a 20 year period for the damage inflicted by the Japanese to the country during World War II.

President Carlos P. Garcia's Programs

President Carlos P. Garcia won the 1957 Presidential election with a comfortable majority, bu this running mate Jose. P. Laurel, Jr. was defeated by his Liberal rival, Diosdado Macapagal. For the first time in the history of Philippine politics, a president was elected with a Vice-President belonging to the rival party.

He favored selective control in order to lessen or "Arrest the expansion of credit for non-productive activities". He advanced the " Filipino First" policy as a strong force to improve the socio economic life of the nation.

but Garcia antagonized those affected by his " Filipino First " policy. this made him unpopular. His administration also encountered the problem of graft and corruption which his political rivals, the Liberal and the Grand Alliance used as an issue during the 1961 elections. Garcia lost in the 1961 election. Diosdado Macapagal won the presidential race.

The Macapagal Administration

Macagapagal promised a "New Era" of prosperity upon his assumption to office in 1961. He enacted a land reform law to benefit the poo people, especially the farmers. He campaigned for nationalism. He moved the Philippine Independence Day Celebration from july 4 to June 12, the date in 1898 when Aguinaldo proclaimed the Philippine Independence. He encouraged the use of Filipino such as government documents as passports and stamps. It was during his term that Philippines formally presented her claim over Sabah which was opposed by Malaysia and Britain. his promise of prosperity did not come true. He lost to Senate President Ferdinand E. Marcos in the 1965 elections. 1