Sep 192014
 

http://wikileaks.org/cable/2006/03/06MANILA1213.html#

Reference ID Created Released Classification Origin
06MANILA1213 2006-03-17 08:22 2011-08-30 01:44 CONFIDENTIAL Embassy Manila
VZCZCXRO2326
RR RUEHCHI RUEHDT RUEHHM
DE RUEHML #1213/01 0760822
ZNY CCCCC ZZH
R 170822Z MAR 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC 0032
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 MANILA 001213

SIPDIS

SIPDIS

DEPT FOR EAP/MTS
STATE PASS TO USTR FOR BWEISEL AND DKATZ
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE AND DBISBEE

E.O. 12958: DECL: 03/17/2016
TAGS: ECON ETRD CASC RP
SUBJECT: DAVAO EAGER FOR INVESTMENT, CALLS FOR REMOVAL OF TRAVEL WARNING

REF: MANILA 0526

Classified By: ROBERT LUDAN FOR REASONS 1.4 (B) AND (D)

¶1. (SBU) Summary. The economy is growing in Davao City
according to local business contacts and the City Mayor’s
office, despite the claimed dampening effect of the State
Department’s travel advisory on the overall business climate.
Although the banana industry suffered setbacks in 2005
(septel), tourism is growing rapidly and U.S. business
contacts were generally optimistic about the economy and the
investment climate. Since the beginning of 2006, the Foreign
Commercial Service has also seen an increased interest by
U.S. companies wishing to sell to the Davao/Mindanao market,
particularly to agribusiness operations. Businesses did not
report any concerns about peace and order, noting that
Mindanao is a huge island and Davao, which is far removed
from areas controlled by Muslim insurgents, does not have any
problems. Both local government and business contacts
requested that the State Department reconsider the current
travel advisory to more accurately reflect the situation.
The Office of the Mayor reported that Davao is one of the
most competitive cities in the Philippines for investment.
Though corruption is present, according to surveys, and may
be on the rise, “safety and security” contribute to Davao’s
competitiveness. The Mayor’s office, on that basis, still
rationalizes its support of extra-judicial killings. End
Summary.

¶2. (U) In a February 23 meeting, Attorney Wendel Avisado,
City Administrator for the Office of the Mayor in Davao City,
told Econ officers that the City of Davao is working hard to
create an attractive investment climate by focusing on
creating more dynamism and general openness. Avisado was
quick to add that Davao is among the top-ranked competitive
cities for investment according to various comparison
studies, which includes a high rating from the well-respected
Asian Institute for Management. Agriculture has long been
the biggest business sector in Davao, but the city is now
seeing growth in the tourism industry, particularly as a
preferred conference and convention location. Most recent
investment is “homegrown,” but the local economy is “slowly,
but surely” growing. Avisado admitted that there is an
escalating trend of corruption in the city, but that when the
Social Weather Station (SWS) released the results of its
latest study, the Mayor did not hesitate to completely
overhaul the entire Business bureau to address the problem.
(Note: The Social Weather Station, a highly reputable NGO
funded by USAID and the Asia Foundation, reported at least a
10 percent increase in solicitation of bribes for most
government services from 2004 to 2005 in Davao City, compared
to two to three percentage points for metro Manila. However,
in a March 2 briefing, SWS President Mahar Mangahas said that
while the Mayor of Davao had fired the entire Business
Bureau, a number of former members were then rehired and
placed in other agencies. End Note).

¶3. (U) City initiatives to attract investment include an
economic emergency plan designed to increase investor
confidence. Avisado said that Davao’s “911” system is the
best in the Philippines and it only takes a few minutes to
receive assistance. The City also has the Davao City
Investments Incentives Group, which provides tax exemptions
for the initial three-year investment period in preferred
sectors; these incentives are in addition to national
incentive programs. Avisado pointed to one recent
improvement in that now people can pay their taxes within 30
minutes when it used to take at least half a day. U.S.
business interests present at the meeting expressed their
appreciation for this improvement. Referring to these
different programs, Avisado said “if it were not so, we could
not be rated number one in terms of competitiveness.”

¶4. (U) Avisado said that while business is increasing,
overall growth is limited by the unfair travel advisories of
the United States and the United Kingdom. According to
Avisado, the threat is “really more imaginary than real, it’s
more dangerous in Manila than in Davao.” He added that he
does not know what the agenda is really about, but that the
City is doing its best to show the world that Davao is safe
and secure. Similar sentiments about the travel warning were
relayed to us on several occasions by Davao Amcham
representatives (Note: The group is not entirely
representative of the U.S. business community in Davao, and
many members are not actually U.S. citizens. End Note). All
contacts advocated for a prompt removal of the U.S. travel
advisory, which would greatly enhance the city’s overall

MANILA 00001213 002 OF 002

attractiveness to foreigners and foreign investment.

¶5. (C) Attorney Avisado said that one of the reasons Davao
should be attractive to foreigners is that it is a very safe
city. Alluding to the city’s reputation for extrajudicial
killings and the Mayor’s support of such actions, Avisado
said “the rule here is, don’t monkey with the law, because
when you do, you put your life on the line. We tell people
that if you commit a crime, you will die. If you are going
to kill innocents, we will kill you first.” Avisado, aware
of US policy that condemns extra-judicial actions by the
Davao Mayor, added that the Mayor has held office for over 15
years and enjoys popular support, evidenced by his landslide
win in the 2004 election. “There are no marches, no
demonstrations, people are content. They support the Mayor.”
He added that the killings are always a political issue for
the Mayor and joked that when the Mayor was last asked
publicly about 800 reported killings, he responded “are you
sure? I think it’s a lot more than that.” Avisado added
that the people killed are really those with criminal
records. Avisado said that “this is why we see a
well-behaved community.”

——-
COMMENT
——-

¶6. The U.S. business community in Davao is generally
optimistic and eager to welcome new investment into the
region. Nearly every person we talked to requested that the
State Department reconsider its travel warning, which is
perceived to discourage economic growth and investment. The
Consular Section is scheduled to review the travel warning
within the month. Human rights organizations and the USG,
through its Human Rights Report, have widely criticized the
hundreds of killings in Davao by suspected vigilante groups,
but the city government does not appear willing to separate
itself from these extra-legal practices.
Jones

   

 

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