Oct 262014

Reference ID Created Released Classification Origin
2008-07-28 06:26
2011-08-30 01:44
Embassy Manila

DE RUEHML #1784/01 2100626
O 280626Z JUL 08
C O N F I D E N T I A L SECTION 01 OF 02 MANILA 001784


E.O. 12958: DECL: 07/27/2018

Classified By: Ambassador Kristie A. Kenney, Reasons 1.4 (b) and (d)

¶1. (C) SUMMARY: The Ambassador on July 24 engaged
Philippine Senate President Manuel “Manny” Villar in a
broad-ranging discussion over a private breakfast of issues
likely to come up soon after the Senate reconvenes July 28.
Villar described how, for very different reasons, the road
ahead looked difficult for both a trade agreement with Japan
and family-planning legislation. The Senate President
expressed his concern over calls to rescind the country’s
Expanded Value Added Tax (EVAT) in the face of rising food
and fuel prices; the tax has been a key source of public
revenue for three years. Regarding the upcoming elections in
the Autonomous Region of Muslim Mindanao (ARMM), Villar
described how incumbent local leaders likely to be affected
were already sharing their concerns, and that in his view any
entity that succeeded the ARMM in the wake of a final peace
deal must govern more effectively if heretofore-marginalized
Muslim areas were to develop and stabilize. The Ambassador
strongly underscored how a lasting peace would bring
significant benefits to all of the Philippines. The two-hour
breakfast conversation concluded with Senator Villar
outlining his worries over the trafficking and mistreatment
of Overseas Filipino Workers (OFWs), who are often duped by
unscrupulous recruiters and then brutalized by their
employers in the Middle East. END SUMMARY.

¶2. (C) Looking ahead to the upcoming Senate session, Villar
anticipated few changes in the Senate’s makeup. He reflected
with pride on how the “hard-working” Senate had passed 36
bills during its previous session, including 12 of the 13
supported by President Arroyo, who he said he had invited to
visit the Senate on July 30. Villar opined that, partly due
to a simple legalistic oversight that could have been easily
prevented, the prospects looked poor for passage of the
Japan-Philippine Economic Partnership Agreement (JPEPA). He
explained that environmental groups were stridently opposed
to the trade agreement because it included terms for trade in
toxic substances — although both nations’ constitutions
proscribe any such trade. He added that, inasmuch as the
Japanese Diet had already ratified the agreement, it was now
likely too late to amend its text and excise the offending

¶3. (C) Turning to the Reproductive Health and Population
Development Act pending in the Senate, Villar lamented that
although everyone understood that the Philippines’ rapid
population growth (over two percent per year) was
outstripping the expansion of economic opportunity, President
Arroyo’s backing of the “off-the-deep-end” hardline position
held by the Catholic Bishops Conference of the Philippines
(CBCP) had contributed to a charged atmosphere surrounding
the issue and made passage of the bill “a real problem.”
Villar reflected that the shrill tenor of debate over birth
control made the controversy over trade with Japan look tame
by comparison.

¶4. (C) Referring to recent steep increases in the cost of
food and fuel that have led to calls for the repeal of the
Expanded Value Added Tax (EVAT), Senator Villar said that
although such a move might look good politically and “put
money in the pockets” of hard-pressed consumers, revenues
from the tax since its 2005 implementation had simply become
too significant a source of funding for infrastructure and
social services to contemplate its revocation. He went on to
say that revocation of such a tax might pose little problem
in a First World nation, but the Philippines doing so would
send the wrong signal to investors and give the appearance of
fiscal irresponsibility. Villar outlined plans to discuss
his views on the EVAT with President Arroyo.

¶5. (C) Discussion turned to upcoming August 11 elections in
the Autonomous Region of Muslim Mindanao (ARMM). Although
Villar professed to be less than fully informed on all the
relevant facets of the issue, he reviewed with the Ambassador
the pros and cons of the postponement proposed by President
Arroyo, noting that while moving back the elections might
boost progress in the peace process, it would leave in place
ARMM elected officials whose performance had — in his view
— been less than stellar. Villar described how mayors and
governors of areas that might be affected by an expanded ARMM
had been in frequent contact recently, expressing their
concerns; the Ambassador offered her reassurances that while
reaching a lasting peace might be difficult, a permanent
peace agreement would be good not just for Mindanao and the
Sulu Archipelago, but for the country as a whole. Villar
noted that whatever governmental entity succeeded the ARMM
must be encouraged and assisted by the government and
international community to be more effective than the current

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¶6. (C) When asked by the Ambassador for his views on the
2010 presidential election, Villar said that he envisioned
President Arroyo stepping down at the end of her term and
returning to private life “unless Erap runs,” referring to
the possible candidacy of former President Joseph “Erap”
Estrada (1998-2001). Villar speculated that Estrada, who was
convicted under the Arroyo administration in September 2007
of plunder and sentenced to life in prison, but later
pardoned by President Arroyo, might seek revenge for
perceived wrongs at the hands of the Arroyo administration,
prompting Arroyo to remain in office. (Estrada was driven
from office by a “people power” revolution in 2001 and
succeeded by President Arroyo.) Knowing that Villar talks
regularly to Estrada, Ambassador wondered whether Estrada
might be better advised to focus on being a good “former”
President. The Ambassador said that, given his conviction on
plunder grounds, he would be unlikely to have good
credibility as a candidate.

¶7. (C) Lastly, Senator Villar commented on highly-publicized
recent cases of Overseas Filipino Workers (OFWs) being
subjected to abuse by employers in the Middle East. He
outlined examples where unscrupulous recruiters had sent
girls as young as 13 to serve as domestic workers in Middle
Eastern countries, and described how he had personally paid
to repatriate 15 such individuals. Villar postulated that
the solution might entail a ban on sending Filipinos to work
in three or four nations in particular.

¶8. (C) COMMENT: Villar has made no secret of his plans to
run for president in 2010. In the course of this
conversation, he frequently referred to his business
background and penchant for solving problems rather than
engaging in rhetoric. In the past we have found the somewhat
introverted Villar to be reluctant to engage with us. He is
increasingly more talkative and interested in dialogue with
us. Our efforts to engage him seem to be paying off. At
this breakfast, he happily drank coffee and shared his
thoughts on fellow senators, world politics, vacation plans,
and legislation.



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