Oct 282014

Reference ID Created Released Classification Origin
2005-12-02 06:45
2011-08-30 01:44
Embassy Manila

This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 05 MANILA 005619




E.O. 12958: DECL: 12/01/2015

Classified By: (U) Charge d’Affaires, a.i., Paul W. Jones
for reasons 1.4 (b) and (d)

¶1. (S/NF) Summary. Comprehensive counterterrorism efforts
— ranging from the military to humanitarian to public
diplomacy — top the broad U.S. agenda in the Philippines’
still struggling democracy. In Manila, you will meet
President Arroyo, National Security Advisor Gonzales,
National Intelligence Coordinating Agency (NICA) Director
Garcia, and a range of congressional leaders. Your visit
will come on the heels of that of Director for National
Intelligence Negroponte. You should use your meetings to
thank President Arroyo for her support against terrorism, to
express support for democratic institutions, to warn against
emergency measures, and to encourage progress in peace talks
with the Moro Islamic Liberation Front (MILF). The
government needs to improve dramatically interagency
cooperation, joint military coordination, and institutional
reform of the police, military, and judiciary to win against
the terrorists. In the nearer term, it needs an
anti-terrorism law, which is currently under consideration in
Congress. RMAS’ robust assistance has helped lead to major
counterterrorism successes. Your public remarks should
underscore our increasingly successful partnership with the
GRP on counterterrorism, our hopes for further peace and
development in Muslim Mindanao in particular, and our support
for democratic processes and rule of law. President Arroyo
continues to seek U.S. approval in her fight for political
survival. Focusing on our substantive cooperation will
address her concerns, without identifying us too closely with
a still-troubled Administration.

¶2. (U) Summary continued. You will also meet with the
American Chamber of Commerce (AmCham) of the Philippines,
which works closely with us and with senior Philippine
officials on improving the business climate here. You will
hear of the range of American business activities, as well as
the significant impediments to greater investment, which the
Philippines desparately needs. You should use this meeting
to encourage the AmCham’s efforts to promote economic reform
initiatives that lead to greater privatization, trade
liberalization, and open markets for the mutual prosperity of
both our countries. End Summary.


¶3. (C) The list of problems faced by Philippines is lengthy
and reflects the substantive agenda ahead of both the GRP and
the USG here: corruption, ineffective governance, endemic and
widespread poverty, weak democratic institutions and
political parties, and challenges to law and order from
ineffective military and police capabilities in the face of
numerous insurgencies and terrorist movements. At the top of
our agenda, as reflected in our Mission Performance Plan, are
our counterterrorism efforts. Jemaah Islamiyah (JI) and Abu
Sayyaf Group (ASG) terrorists continue to elude government
forces in Mindanao and the Sulu Archipelago, while the
Communist Party of the Philippines/New Peoples’ Army
(CPP/NPA) maintains a country-wide presence bent on
destabilization. The Rajah Solaiman Movement (RSM) —
despite the recent arrest of its leader, Ahmad Santos —
represents a growing worry because of its ties to foreign
financing and the ability of its members — Christian
converts to Islam — to “blend in.” The Philippines has a
recent history
of terrorist attacks on its own territory: the February 28,
2004, bombing of Superferry 14, which killed over one hundred
Filipinos, was the second worst terrorist attack in Asia
after the October 2002 Bali bombings, while the February 14,
2005, “Valentine’s Day” bombs in Manila and Mindanao
devastated crowds of shoppers and commuters.

¶4. (S/NF) Amid these challenges, President Arroyo continues
to fend off Opposition attempts to force her to step down
following allegations that she engaged in cheating to win the
2004 presidential election and that her immediate family
benefited from illegal gambling revenues. Arroyo continues
to look for positive, public signs of support from the United
States. Pictures of Arroyo with President Bush at the APEC
Summit were prominently displayed on the front pages of local
newspapers, and she will want to use your visit also to
bolster the perception that the U.S. and the Philippines
remain close partners, and that she personally has close ties
to senior USG officials.

¶5. (S/NF) The government’s political woes have not yet had a
significant impact on the Armed Forces of the Philippines and
the Philippine National Police, our two principal
counterterrorism partners, but could over time. National
Security Advisor Gonzales told the Charge November 21 that he
had recommended that the President impose emergency rule to
counter the CPP/NPA threat. Recent RMAS reporting indicates
Arroyo may indeed be weighing whether to enact emergency rule
— a move we believe she had backed away from in mid-October.
Resorting to emergency rule, a declaration of martial law,
or a coup attempt would likely divide the military and the
police, inflame the Opposition, and further diminish the
attractiveness of the Philippines as an investment
destination. The USG would oppose any of these options, and
we have said so publicly and privately.


¶6. (SBU) Our counterterrorism engagement in the Philippines
ranges from humanitarian relief and development to the
military and public diplomacy. USAID’s Livelihood
Enhancement and Peace (LEAP) program has reintegrated over
28,000 former Moro National Liberation Front (MNLF)
combatants into productive society as successful farmers, and
stands poised — should the GRP sign a peace agreement with
the MILF, as both sides increasingly appear to expect in the
next few months — to provide similar assistance to the
MILF. USAID’s broad spectrum of development programs (in
infrastructure, education, governance, health, economic
growth, environment, and energy) in conflict-affected areas
of Mindanao have made a positive impact in communities
vulnerable to exploitation by terrorists, as well as
contributed to greater judicial efficiency, electoral reform,
and promotion of rule of law nationwide.


¶7. (C) The Joint US Military Assistance Group-Philippines
(JUSMAG-P) plays an increasingly vital role in our efforts
to improve Philippine capabilities. The US-trained and
equipped Light Reaction Companies (LRCs) and Light Infantry
Battalions (LIBs) are the tip of the spear in the
counterterrorism fight. Although the AFP failed to capture
ASG leader Khaddafy Janjalani during Operation Layas Pagad
this summer, it did, as a direct result of US support and
training, conduct unusually sustained combat operations in
the field for over 60 days. Over the longer term, JUSMAG-P
support for the Philippine Defense Reform (PDR) program will
prove key to the GRP’s ability to stand alone without US
assistance and transform the AFP into a more modern,
effective, and transparent institution, capable of meeting
the needs of the Philippine people and serving as a more
reliable coalition partner.

——————————————— ————

¶8. (C) Joint Special Operations Task Force-Philippines
(JSOTF-P) provides advice, assistance, and intelligence
fusion to the AFP in the hunt for wanted terrorists.
Additionally, JSOTF-P has broadened its scope to include
civil-military operations in Mindanao. This approach,
coupled with USAID’s longer-term programs, attacks the
environment in which the terrorists thrive. Following a
successful program in Basilan island (the former stronghold
of the ASG), JSOTF-P’s efforts in support of the AFP
civil-military operations will now focus on the island of
Jolo in the Sulu Archipelago, the current ASG base, with the
goal of changing perceptions of the AFP and Philippine
government among the citizens of Mindanao.

¶9. (S/NF) There are indications that ASG leaders Janjalani
and Abu Solaiman as well as JI operative Umar Patek are now
in Jolo. JSOTF-P Liaison Coordination Elements (LCEs) on the
island can help improve AFP efforts to target the terrorists
through intelligence fusion and training assistance.

¶10. (SBU) The Philippines remains an exuberant media
environment, with much of our effort devoted to ensuring that
journalists get their facts straight. We also take every
opportunity to get our side of the story out. Initiatives,
such as our recently published “Muslim Life in the
Philippines,” have found a ready audience, and we have in the
works a film chronicling the successful joint US-AFP effort
to defeat the ASG on Basilan. Our Public Affairs office
works hand-in-glove with both USAID and JSOTF-P to ensure
that perceptions of our efforts on every front are positive.


¶11. (S) Our rewards effort builds upon the synergies between
the State and DoD programs to attack the web of social,
religious, and cultural ties upon which the terrorists have
relied for their safety and freedom. The promise of a reward
encouraged individuals to step forward to help the AFP get
ASG leader Hamsiraji Sali, ASG terrorist Toting Craft Hanno,
and JI operative Jeki. The USG has already paid out rewards
for numerous other terrorists. We anticipate the recently
announced reward of $10 million under Rewards for Justice for
the JI’s Dulmatin will help bring him to justice.


¶12. (S/NF) RMAS support and direction of the PNP’s
Intelligence Group (IG), Task Force Sanglahi, and the
Intelligence Service of the Armed Forces of the Philippines
(ISAFP) have proven critical to the capture of a number of
terrorists and the disruption of operations directed against
US interests. RMAS assistance helped lead to major
successes, such as the capture of RSM leader Ahmad Santos and
JI operatives Jeki and Faiz.


¶13. (U) Although the Philippine economy is growing by nearly
5% each year, it is constrained by massive debts to both
domestic and foreign bond-holders. Combined liabilities of
the government and state-owned enterprises equal 90% of GDP,
and the debt-service payments on these loans consume
two-thirds of the annual budget. The just implemented
expansion of the Value Added Tax to include fuel and power
will help the Government further reduce its fiscal deficit
and increase spending on social services, such as health and
education, and on the expansion and repair of roads and
railway lines. There appears to be a grudging acceptance of
the need for new taxes to restore fiscal imbalances.

¶14. (U) A stronger, more stable economy could boost foreign
direct investment to the Philippines, which flows in at a
paltry level compared to other countries in East and
Southeast Asia. To boost development and prosperity, the USG
encourages economic reform initiatives toward greater
privatization, trade liberalization, and open markets, and we
have worked closely with GRP officials on the Philippines’
Millennium Challenge Corporation concept paper focusing
heavily on anti-corruption and revenue enhancement efforts.
US firms account for the largest stock of foreign direct
investment in the country, and the US is still one of the
country’s largest trading partner, counting trade in goods
and services. But as you will hear from members of the
American Chamber of Commerce, corruption is a significant
impediment to investors, along with the high cost of
electricity, poor infrastructure, bureaucratic delays, weak
enforcement of intellectual property rights, and an
unpredictable legal system.


¶15. (U) The American Chamber of Commerce of the Philippines
works closely with us to promote a sound business environment
in the Philippines. It produces reports and meets with senior
government leaders, including the President. The AmCham is a
private, independent and non-profit association incorporated
under Philippines laws in July 1920. It is affiliated with
the Chamber of Commerce of the U.S.A. (COCUSA) and the
Asia-Pacific Council of American Chambers (APCAC). It
maintains close liaison with other foreign chambers in Manila
and Philippine business groups: the Employers Confederation
of the Philippines (ECOP), Philippine Chamber of Commerce &
Industry (PCCI), Philippine Association of Multinational
Regional Headquarters (PAMURI), Makati Business Club (MBC),
Management Association of the Philippines (MAP), Financial
Executives Institute of the Philippines (FINEX), and other
trade and business organizations. It also networks in the
U.S. with the Philippine-American Chamber of Commerce in New
York, US-RP Business Committee, Asia Society, and the
US-ASEAN Council. AmCham works closely with various parts of
the American Embassy in Manila, particularly with the Foreign
Commercial Service, the Economic Section, the Agricultural
Office, USAID, and the Consular Section.


¶16. (SBU) In both your private and public remarks, we
encourage you to highlight:

— Partnership: The Philippines is a valued partner in the
Global War on Terror, as well as a Major Non-NATO Ally
(despite the sudden pull-out of Philippine troops from Iraq
in July 2004 in response to the kidnapping of Philippine
driver Angelo De La Cruz);

— Anti-terrorism legislation: the Philippine House has
consolidated its efforts behind one anti-terrorism bill,
which is now out of Committee for consideration by the full
House. The Senate has also consolidated behind one bill.
However, legislative action remains stalled, despite pressure
from the Arroyo administration for action. You should stress
the need to pass effective anti-terrorism legislation that
will give law enforcement agencies the tools to fight and
defeat terrorism, without compromising civil liberties;

— Peace talks: With growing optimism by both the
Government and the MILF that the Malaysian-brokered peace
talks could end with an agreement by mid-2006, both sides are
also looking for USG developmental support similar to what we
provided in the wake of the 1996 agreement with the Moro
National Liberation Front. Settling Bangsamoro claims for
autonomy would politically mainstream a 15,000-strong
insurgent group, and make a significant contribution to
stabilizing the region. You should commend President Arroyo
for the progress her government has made thus far, emphasize
the strong US backing for the successful conclusion of the
negotiations, and note USG willingness to consider new
assistance programs by USAID to advance the goals of the
peace agreement.


¶17. (SBU)

— Espionage case: The October 2005 arrest in the United
States of an FBI employee of Filipino descent for espionage
made front page news for weeks in the Philippines, focusing
on his alleged ties with Opposition leaders former president
Estrada. Alleged Embassy reporting was quoted in the press,
apparently designed to create discord between the government
and the United States. Our consistent line is that the issue
remains before the courts and we cannot comment on law
enforcement matters.

— Alleged rape case: Six U.S. Marines are now under
investigation by Philippine officials as well as by US
military authorities for involvement in an alleged rape in
Subic on November 1. They remain in U.S. custody under the
terms of the Visiting Forces Agreement (VFA). Our consistent
line is that we intend fully to comply with the terms of the
VFA, that we are committed to seeing justice done, and that
the accused should be presumed innocent until proven guilty.

Visit Embassy Manila’s Classified website:
http://www.state.sgov.gov/p/eap/manila/index. cfm




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