Oct 282014


Reference ID Created Released Classification Origin
2005-11-02 12:00
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.
C O N F I D E N T I A L SECTION 01 OF 04 MANILA 005137



E.O. 12958: DECL: 11/03/2015

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

¶1. (C) Summary. Our strategic relations with the
Philippines are important to both countries, and we seek to
work even more constructively not only bilaterally but in a
variety of regional and international fora as well. We have a
comprehensive program of engagement with the GRP — ranging
from counterterrorism cooperation and defense and police
reform to discussions on trafficking in persons and Trade and
Investment Framework Agreement (TIFA) negotiations. You will
see most of the major players during your visit: Executive
Secretary Ermita; Foreign Secretary Romulo; Defense Secretary

Cruz; National Security Advisor Gonzales; and Armed Force of
the Philippines (AFP) Chief of Staff Senga. You should use
your meetings to push for institutional reform, TIP
convictions, and anti-terrorism legislation. We suggest you
convey our confidence in the constitutional framework for
resolving political differences, and our opposition to
martial law or emergency rule, which would undermine the
fight against terrorism, defense reform, and prospects for
better economic development. End Summary.


¶2. (C) President Arroyo continues to fight for her political
viability, as she struggles against allegations that she
engaged in cheating to win the 2004 presidential election as
well as other allegations that were at the basis of the
failed impeachment effort earlier this year. There is
growing concern that these domestic woes are increasingly
distracting her and senior officials from the GRP’s
substantive agenda, which we share in many important areas.
The Congress and nation are now set on a course of
constitutional change, which potentially could transform the
Philippines into a parliamentary system, with or without a
President, within one to two years, and possibly create a
truly federal state. Much legislative and political capital
and attention will be focused on this process over the months
ahead, another distraction to progress on important
substantive goals as well as passage of needed legislation.
GMA’s political woes have not yet had a significant impact on
the AFP and the Philippine National Police (PNP) — our two
principal counterterrorism partners — but could have an
effect over time. Either a declaration of martial law or a
coup attempt would prove disastrous to either institution, as
well as to investor confidence and to the Philippines’
international image, as would the perhaps even more likely
(but as yet still unlikely) scenario of emergency measures
imposed by the GRP (septel).


¶3. (C) Despite never-ending domestic political dramas and
tensions, the Philippines remains an important strategic
partner, treaty ally, and a vibrant (if messy) democracy, as
GRP officials will welcome again hearing from you. No matter
how much the GRP and GMA herself claim to seek a balanced
relationship among the US, PRC, and Japan, the US is
virtually indisputably the Philippines’ number one partner.
Our views and opinions matter considerably here, as we have
seen once again by recent efforts to get the USG to take
sides in GMA’s domestic dilemmas. Our security alliance
remains robust and of importance to US troops and USG
objectives as well as to those of the GRP in enhancing
regional stability and in combating terrorism. We have
worked together productively in regional and international
fora, and need to continue to seek better ways to ensure even
more effective communication and cooperation. As Foreign
Secretary Romulo proudly noted to CDA on November 3, the GRP

had voted with the US in 101/105 votes in the UNSC during its
tenure. We will want to involve the GRP closely in the
US-ASEAN Enhanced Partnership, and should try hard to get the
GRP to focus on a productive agenda during its tenure
beginning in summer 2006 as ASEAN Chair. The GRP has not
always been a very pro-active partner in APEC — its
chairmanship of the APEC Anti-Terrorism Task Force from our
perspective here has been notably lackluster — but there is
goodwill in the GRP to do still more. This will be a good
opportunity to ask for and to discuss new ideas and
initiatives for regional cooperation.

¶4. (C) Many observers here continue to obsess about the
booming Philippine-PRC relationship, with numerous
commentaries warning that this will come at a cost to the
even more important US-Philippine ties. We should be
prepared to discuss candidly our views of the PRC and its
intentions within the region and globally, and to highlight
the importance with which we view integrating the PRC ever
more closely into the regional and international communities.


¶5. (C) The terrorism threat here is real. Porous borders,
weak institutions, fragile government, a long-running Muslim
insurgency, and ever-present corruption make the Philippines
highly vulnerable. Jemaah Islamiyah (JI) and Abu Sayyaf
Group (ASG) terrorists continue to elude government forces in
Mindanao, while the Communist Party of the Philippines/New
People’s Army (CPP/NPA) maintains a country-wide presence
bent on destabilization. The Rajah Solaiman Movement (RSM)
represents a significant 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 killed and injured many shoppers and commuters.

¶6. (C) The GRP has, however, racked up some recent
successes. On October 26, Philippine military and police
arrested Ahmad Santos, the fugitive leader of RSM, and eight
other suspected terrorists at a safe house in Zamboanga. On
the same day, Philippine Air Force intelligence operatives
seized Sattar Yusop, an ASG member under US indictment for
his role in the Dos Palmas kidnappings. On October 28, a
Philippine court convicted and sentenced to death three JI,
RSM, and ASG terrorist for their roles in the 2005
“Valentine’s Day” bombing in Manila (septel).

——————————————— —

¶7. (SBU) Our counterterrorism engagement in the Philippines
ranges from humanitarian relief and economic development to
military cooperation and public diplomacy. USAID’s Livelihood
Enhancement and Peace (LEAP) program reintegrated over 28,000
former Moro National Liberation Front (MNLF) combatants into
productive society as successful farmers, and USAID stands
poised — should the GRP sign a peace agreement with the Moro
Islamic National Liberation Front (MILF) — to seek funding
to provide similar assistance to the MILF.


¶8. (C) Joint US Military Assistance Group-Philippines
(JUSMAG-P) plays a 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. 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, capable
of meeting the needs of the Philippine people and serving as
a reliable coalition partner.

——————————————— ————

¶9. (C) In addition to helping the AFP fuse intelligence with
operations in the hunt for wanted terrorists, Joint Special
Operations Task Force-Philippines (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. JSOTF-P’s
efforts in support of the AFP will initially focus on the
island of Jolo in the Sulu Archipelago, an established ASG
stronghold, with the additional goal of improving perceptions
of the AFP and GRP among the citizens of Mindanao.


¶10. (SBU) The Philippines is an exuberant media environment.
Much of our effort ends up devoted to ensuring that
journalists get their facts straight. However, we also take
every opportunity to get our side of the story out. Our
initiatives, such as “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. PAS works hand-in-glove with both USAID and
JSOTF-P to ensure that perceptions of our efforts on every
front are positive. There will be a high level of interest
in your press conference.


¶11. (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 gobble up a
third of the annual budget. The just implemented expansion
of the Value Added Tax to include fuel and power will help
the GRP 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.
Although the GRP has tried to soften the initial impact of
the tax, there are signs of continuing public protest over
the higher price of oil, and calls by political opponents to
amend or repeal the VAT law because it accelerates inflation.

¶12. (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 FDI in the country,
and the US is still 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 an admitted 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.

——————————————— —

¶13. (U) The USG addresses bilateral, sectoral, and even
individual company issues through regular Trade and
Investment Council meetings organized under the Trade and
Investment Framework Agreement (TIFA). The USG provides
advice and support for policy reform and projects through
technical assistance, training, and development programs
through USAID, which may include access to funds from the
Millennium Challenge Account. Even so, there are prime
opportunities in various fields, including information
technology with the proliferation of call centers and back
office operations, mineral extraction, energy development,
agriculture, and the country’s primary export —
semiconductors and electrical components. Working to the
country’s short-term financial advantage is the enormous
influx of remittances from Filipinos living and working
abroad, who are sending home over $10 billion this year,
which bolsters consumer spending, props up the peso, promotes
development projects, and helps the country meet its
financial obligations.


¶14. (U) The Philippines is an origin point for
internationally trafficked persons and also suffers from an
internal TIP problem. Most victims are young women. The GRP
is nonetheless publicly steadfast against TIP. In 2003,
Congress passed Republic Act 9208, a comprehensive
anti-trafficking law. However, the State Department
designated the Philippines as a Tier 2 Watch List country in
2004 and re-designated it on the Tier 2 Watch List in 2005.
You should underscore the seriousness of the TIP problem with
GRP officials, including the possibility of a downgrade to
Tier 3 next year. Ambassador John K. Miller of G/TIP is also
scheduled to visit the Philippines December 3-6.

¶15. (SBU) The GRP’s ability to address the problem is
limited by poverty, unemployment, and socio-economic factors
that encourage migration, a weak rule-of-law environment, and
sex tourism. The GRP coordinates anti-TIP efforts through
the Inter-Agency Council Against Trafficking (IACAT), which
is chaired by the Secretary of Justice. GRP enforcement of
its anti-trafficking law has increased as more law
enforcement officers, prosecutors, and judges receive
training. Although several TIP cases are pending, there have
been no convictions under the anti-trafficking law yet You
and Ambassador Miller can make even more explicit that
convictions will be the most meaningful evidence of real
progress in this important fight.


¶16. (SBU) In your meetings with Executive Secretary Ermita,
Foreign Secretary Romulo, National Security Advisor Gonzales,
Defense Secretary Cruz, and AFP Chief of Staff Senga, you
should stress our support for effective interagency
counterterrorism cooperation. The Philippine House has
consolidated its efforts behind one anti-terrorism bill,
which is now out of Committee for consideration by the full
House. However, there are five different bills pending in
the Senate, three of them filed by the Opposition. Nominally
pro-Arroyo Senator Manuel Villar is moving to consolidate
these drafts into one bill. In your interactions with all
your interlocutors and the press, you should stress the need
to pass effective anti-terrorism legislation that will give
law enforcement agencies the tools to fight and defeat


¶17. (C) Rumors continue to abound about GRP planning to
impose emergency rule and Opposition efforts to foment a
coup. Either emergency rule or a coup attempt would splinter
the AFP and PNP, undermine the nascent reform efforts
currently underway, intensify economic problems, fuel the
Communist insurgency, and potentially plunge the country into
turmoil. You should stress in each of your meetings the
USG’s confidence in the constitutional process in the
Philippines, and firm opposition to any extraordinary

¶18. (U) Embassy will separately provide an annotated
schedule, with goals and talking points for each meeting.

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




Sorry, the comment form is closed at this time.