Cato Foreign Policy Briefing No. 12 July 29, 1991

Foreign Policy Briefing

The U.S. Military Presence in the Philippines:
Expensive and Unnecessary

by Ted Galen Carpenter

Ted Galen Carpenter is director of foreign policy studies at the Cato Institute.


Executive Summary

Washington's recent decision to vacate Clark Air Base in the Philippines is a long-overdue step in the right direction. But it is a measure of the Bush administration's determination to preserve obsolete U.S. military commitments around the globe that it took an act of God to dislodge U.S. forces from Clark. Not until the eruption of Mount Pinatubo buried the facility in ash and mud, creating in the words of one observer, "a landscape of mind-boggling ruin"(1) that would have cost an estimated $520 million to repair,(2) did the administration finally abandon its goal of retaining the base.

Unfortunately, at the same time that U.S. officials agreed to withdraw from Clark they negotiated a new agreement with the Philippine government that will extend the lease on the Subic Bay Naval Base for 10 years. That action is not surprising. Although Pentagon leaders insisted almost to the bitter end that both Clark and Subic Bay were essential installations, when pressed they conceded that Clark was expendable. Conversely, Subic Bay's deep-water harbor and extensive ship repair facilities were held to be "irreplaceable."

The new base agreement will be extremely expensive for American taxpayers. The official compensation will start at $203 million in "security assistance grants" during fiscal year 1993, down from $481 million per year for both bases in the last year of the current lease. But the official compensation figure is only the tip of the financial iceberg. It will cost more than $200 million just to repair the damage done to the base by the eruption of Mount Pinatubo. Moreover, a large "informal" compensation package has always been an implicit quid pro quo of U.S. access to the Philippine installations. Currently, that includes a $160 million a year contribution to the Multilateral Assistance Initiative, various food aid and disaster relief programs, and Washington's vigorous support for generous World Bank and Asian Development Bank loans to Manila.

The new agreement continues and in some areas even expands such disguised compensation. (For example, Manila expects to receive "surplus" military and medical equipment with a value of more than $150 million a year from the United States.) A spokesman for the Philippine negotiating team estimated that the total compensation would come to at least $773 million a year.(3)

That huge price tag would make the new lease on Subic Bay a dubious bargain even if the United States actually needed the base for its national defense. But the installation is not essential for the protection of legitimate American security interests. That was the case even during the cold war, and it is doubly true in the post-cold-war era.

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1991 The Cato Institute
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