Oct 282014

Reference ID Created Released Classification Origin
2009-07-08 07:35
2011-08-30 01:44
Embassy Manila

DE RUEHML #1440/01 1890735
O 080735Z JUL 09
S E C R E T SECTION 01 OF 03 MANILA 001440


E.O. 12958: DECL: 07/07/2019

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

¶1. (S) SUMMARY: Welcome to the Philippines, Director
Panetta! Your visit to Manila will underscore the special
ties we share with the Philippines, a strong regional ally in
the fight against terrorism. The administration of President
Gloria Macapagal Arroyo is strongly pro-U.S., and committed
to continued close security, intelligence and economic ties.
Your visit comes at a key moment for our joint
counterterrorism efforts. Philippine security and
intelligence services have carried out dozens of successful
operations against terrorist groups since 2002, but the
security situation in central Mindanao and the Sulu
Archipelago has deteriorated with the failure of peace talks
with Muslim insurgents and a long-running international
hostage situation. Your discussions with President Arroyo
and other key national security figures can reinforce the
need for a more concerted effort to revive the peace process
— and the ceasefire that accompanied it — while undertaking
more aggressive action against a few key terrorist targets.
National elections scheduled for 2010 are already having a
distinct impact on all levels of Philippine society, and are
certain to bring increased violence, but none of the leading
candidates advocate any radical departure from our existing
bilateral relationship. The Philippines has felt the effects
of the global financial crisis, but the banking system
remains sound. END SUMMARY.


¶2. (C) With less than a year left in office, President
Gloria Macapagal Arroyo continues to balance competing
political interests amidst economic challenges. President
Arroyo has weathered numerous unsuccessful impeachment
efforts and low-level military coup attempts, and her
administration has been plagued by allegations of serious
corruption, as well as charges her supporters are attempting
to juggle the Philippine political system and Constitution to
provide legal protection for Arroyo and her family after her
term ends next year. With national elections scheduled for
May 2010, nearly 20 Cabinet members have announced their
intention to seek office, including several focused on the
presidency, so national priorities are already being colored
by personal political goals. Some candidates have attempted
to politicize aspects of our security relationship, such as
the Visiting Forces Agreement (VFA), but none of the likely
presidential candidates would represent a radical departure
from the status quo. While President Arroyo has ensured that
all top security officials are closely allied to her, the
military and policy have largely stayed out of political
debates and remained focused on their roles.


¶3. (U) The Philippine economy has averaged better than five
percent growth for the past eight years, but under the impact
of the global financial crisis, GDP growth may be outpaced by
the country’s annual 2.04 percent population growth. Should
the global economic downturn be prolonged, the impact on
poverty in the Philippines, where more than 40 percent of the
population lives on less than two dollars per day, could have
a tangible impact on domestic politics. Poverty is
especially severe in the Muslim areas of the southern
Philippines. On the positive side, the Philippine banking
system is relatively sound and not heavily exposed to risks
from current global financial turmoil. The U.S. remains the
Philippines’ largest trading partner, with over $17 billion
in two-way trade during 2008, and is one of the largest
investors, with $6.7 billion in equity.


¶4. (S) The United States and the Philippines have scored
important successes on the security cooperation and
counterterrorism fronts; in the last three years, these
efforts have resulted in the death or capture of a dozen key
high-value terrorist leaders and over 250 other terrorism
suspects. Despite persistent shortfalls in logistical
assets, Philippine security forces, acting with USG technical
assistance, have killed or captured numerous Abu Sayyaf Group
(ASG) and Jemaah Islamiyah (JI) leaders, and disrupted ties
with rogue Moro Islamic Liberation Front (MILF) elements.
However, the kidnapping of three Red Cross workers in January
by the ASG in Jolo, and a spate of other
kidnappings-for-ransom in Mindanao, has allowed extremists to
replenish coffers drained by the successful cutoff of foreign
funds and bring some new recruits to their ranks. Once the

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Red Cross hostage situation is resolved, the Philippine
military and police will need to significantly intensify
operations to roll back the extremists’ gains and deal a more
decisive blow to their battered organizations. Senior
Philippine officials have voiced strong support for our
proposals to enhance Philippine capabilities to allow for
more precise targeting of terrorists.


¶5. (S) Peace talks with separatist Moro Islamic Liberation
Front (MILF) insurgents remain stalled since a key peace deal
was ruled unconstitutional in August 2008. The resulting
fighting with rogue MILF commanders has undermined a
six-year-old ceasefire and displaced tens of thousands of
civilians. While President Arroyo voices continued firm
commitment to a lasting agreement, and has named a new peace
panel and carried out grass-roots consultations throughout
Mindanao, government and MILF negotiators have failed to sit
down with their Malaysian facilitators. A firmly
reestablished cease-fire and renewed face-to-face discussions
would create a more positive atmosphere for talks and allow
thousands of civilians to return home. Meanwhile, the
continued fighting in Mindanao has hampered extensive
development efforts by USAID and other foreign donors that
help alleviate the economic disparities that contribute to
extremism. Deadly bombings during early July — by a variety
of actors, likely including the Abu Sayyaf Group and rogue
MILF elements — in Mindanao and the Sulu Archipelago have
led to fears that a return to peace talks may be further


¶6. (C) President Arroyo continues to express her unwavering
commitment to making greater progress on the long-standing
problem of extrajudicial killings, and has taken concrete
steps in this direction. Partly due to increased attention
by the Philippine government, the number of extrajudicial
killings decreased dramatically through 2007 and 2008. While
many execution-style slayings among politicians and others
are likely a result of local disputes and long-simmering
feuds among rival clans, the government acknowledges the need
to do more to ensure that all such crimes — whether or not
linked to security forces — are fully investigated, and that
those responsible are brought to justice. The Embassy
continues to press the issue at the highest levels of the
Philippine government, and has implemented a comprehensive
plan of public outreach activities, training, and
institution-building to make further progress in addressing
the problem. Your visit will provide an opportunity to
further underscore the need for renewed efforts to combat
extrajudicial killings.

——————————————— —

¶7. (C) Despite court challenges to the Visiting Forces
Agreement (VFA) and opposition from leftists to U.S. military
presence, the Arroyo administration continues to demonstrate
strong support for our military partnership. The robust U.S.
military presence in the Philippines includes a joint U.S.
Military Assistance Group (JUSMAG), Defense Attache Office,
and approximately 550 Joint Special Operations Task
Force-Philippines (JSOTF-P) personnel. Apart from JUSMAG’s
traditional role of training and military sales, we have
focused on assisting the Armed Forces of the Philippines
(AFP) with revising their doctrine to promote ethics and
human rights. Members of JSOTF-P work side-by-side with
Philippine troops in Mindanao and the Sulu Archipelago,
advising and assisting them in counterterrorism operations.
At the same time, our military closely cooperates with U.S.
law enforcement and intelligence agencies to achieve
important successes in counterterrorism efforts.

¶8. (C) Several large-scale bilateral exercises are conducted
each year between U.S. and Philippine troops, along with
dozens of other training activities, exchanges, and ship
visits that often include civil-military operations.
Humanitarian projects associated with the exercises have been
welcomed by the Philippine government and population. More
than 28,000 people received medical and dental care as part
of the civil-military component of the Balikatan exercise
that concluded at the end of April. Thousands more receive
assistance each year through projects that JSOTF-P conducts
in the southern Philippines with their AFP counterparts and
through the more than 130 visits by U.S. ships.

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¶9. (C) Since the mid-1990s, USAID has implemented a sizable
and highly effective program throughout the island of
Mindanao and the neighboring Sulu Archipelago provinces of
Basilan, Jolo, and Tawi-Tawi. During this period,
approximately two-thirds of USAID resources for the
Philippines have been committed to these areas, complemented
by 1207 funds, JSOTF-P activities (since 2002), and
humanitarian missions such as the USNS Mercy.
USAID-sponsored activities in these areas include
infrastructure development, school computerization, health
and education improvement, environmental management, former
combatant reintegration, and governance. USAID financed the
construction of more than 800 community-level and over 40
regional-impact infrastructure projects throughout the
conflict-affected communities of the southern Philippines.
The primary objective has been to encourage economic growth
and demonstrate sustained commitment by the Philippine and
U.S. governments to establishing security.



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