Oct 292014
 

http://wikileaks.org/cable/2007/09/07MANILA3160.html#
Reference ID Created Released Classification Origin
07MANILA3160
2007-09-18 09:24
2011-08-30 01:44
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Manila

VZCZCXRO0228
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #3160/01 2610924
ZNR UUUUU ZZH
O 180924Z SEP 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8303
INFO RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
UNCLAS SECTION 01 OF 03 MANILA 003160

SIPDIS

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PREL CASC BTIO BEXP EAIR ECON RP
SUBJECT: U.S. BUSINESS PLAYING MAJOR ROLE IN DYNAMIC CLARK REGION

REFS: (A) Manila 06 2637 (B) Manila 06 3414

¶1. (U) Summary. During an August 16 visit to Clark Freeport Zone,
the Charge d’Affaires focused public and corporate attention on the
positive role of U.S. business in the Philippines. Joining
Philippine President Arroyo, the Charge attended the groundbreaking
ceremony for Texas Instruments new billion dollar semiconductor
manufacturing plant which will eventually provide over 3000 new
jobs. Clark is a rapidly developing region with potential for much
greater growth as highways linking Manila and Subic port are
completed in 2008 and plans for airport expansion are realized; the
Ambassador and DCM visit regularly (reftels). Highlights of the
visit to Clark included briefings by executives of the Clark
Development Corporation and the Clark International Airport
Corporation, as well as tours at America Online’s support center and
the Clark Museum on the former site of Clark Air Force Base. A
radio and television simulcast plus a local media roundtable
produced widespread media coverage of the Texas Instruments
investment and the additional opportunities U.S. business is
bringing to the historic Clark-Subic regions, and throughout the
Philippines.

CLARK
—–

¶2. (U) The Clark Freeport Zone sits on the site of former Clark Air
Force Base near Angeles City just north of Manila on the island of
Luzon, the largest island in the Philippines. The U.S. Air Force
turned over control of the facility and land to the Philippines
following the eruption of Mt. Pinatubo in 1991. Several U.S. and
other foreign businesses have located facilities in the area which
is served by the Diosdado Macapagal International Airport. Nearly
500,000 passengers transited the fast-growing airport in 2006. A
new express highway connects Clark to Manila and additional
extensions are planned which will make Clark the center of a “high
tech” corridor between Subic Bay port facilities in the west, Manila
to the south, and the city of Tarlac to the north.

2ND TEXAS INSTRUMENTS FACILITY PROVIDES HIGH TECH JOBS
——————————————— ———-

¶3. (U) Texas Instruments constructed in 1978 its first Philippines
production facility in Baguio, several hours north of Manila, due to
its favorable climate for electronics manufacturing and supply of
high skilled labor. It employs over 2200 people. In April 2007,
Texas Instruments announced a $1 billion dollar expansion project at
the Clark Freeport Zone. The 8-hectare facility will assemble and
test semiconductors and produce more sophisticated products,
ultimately employing around 3000 Filipinos. Texas Instruments says
its Clark operations will be its most environmentally efficient
investment site in the world. A major source of pride for the
Arroyo administration is that the Philippines won the project over
neighboring countries including China, Thailand, and Vietnam.

¶4. (U) The Charge participated in a groundbreaking ceremony
alongside President Arroyo and other local and regional officials.
During her remarks, President Arroyo said she supports the continued
creation of a “high tech” corridor. She referred to the selection
process as a “courtship” and members of her government as part of
the courtship team. She indicated that the national government
would continue to play a major role in promoting foreign
investment.

CLARK DEVELOPMENT CORPORATION PLANNING EXPANSION
——————————————— —

¶5. (U) Established in 1993, the Clark Development Corporation (CDC)
manages the daily operations of the Clark Freeport Zone. By 2007,
Clark had 401 registered business enterprises with over 50,000
employees. The majority of businesses are service providers or
manufacturers. President Arroyo placed the Clark Freeport Zone
under the jurisdiction of the Philippine Economic Zone Authority in
2005 to prevent business pullout after the Supreme Court nullified
tax incentives due to an anomaly in the law covering Clark Freeport.
In April 2007, President Arroyo signed orders correcting the
anomaly, and guaranteeing the tax incentives under the
administration of the CDC.

¶6. (SBU) During informal briefings, CDC Chairman Rizalino Navarro
described plans to finish connecting the Subic Bay Freeport Zone (on
the site of the former U.S. naval facility), Manila and the city of
Tarlac via superhighways, with Clark at the center. The CDC also
favors the signing of Executive Order 500B that would liberalize the
airline industry allowing more carriers to operate out of Clark’s
rapidly growing airport. CDC officials said they would like Clark’s
airport to become the premier international airport serving the
Philippines and a major Southeast Asian hub, eventually to include
direct routes for U.S. airlines. A Chinese consortium is conducting
a pro bono feasibility study for airport expansion. CDC officials
pointedly asked the Charge what the U.S. reaction would be if

MANILA 00003160 002 OF 003

Chinese investment developed a former U.S. Air Force base. Charge
said that U.S. companies must be offered fair and transparent
opportunities in all airport expansion projects; CDC officials
readily agreed.

CLARK INTERNATIONAL AIPORT CORPORATION (CIAC) SEEKS TO UNSEAT NAIA
AS PHILIPPINES’ MAIN INTERNATIONAL AIRPORT
——————————————— ———

¶7. (U) Beginning in 2002, Clark’s airport has steadily expanded its
passenger capacity, handling almost 500,000 in 2006 due in large
part to low cost carriers. Recently, both Cebu Pacific and
Philippine Airlines announced plans to establish a hub at Clark. To
handle expansion, Clark Airport Corporation has developed a master
plan including the creation of a second runway to increase aircraft
capacity, a new terminal to accommodate 12 million passengers per
year, and a maintenance facility. Projected costs are over a
billion dollars. The Chinese consortium conducting the feasibility
study expects in finish by September 2007.

¶8. (SBU) Clark Airport President Victor Luciano stated that he
expected the bidding process for expansion contracts to be fair and
open and that U.S. firms would have an equal opportunity to win
contracts. He said that he expects Clark’s airport to supplant
Manila’s as the international airport of choice in the Philippines
due to its location at the center of a high tech corridor and the
inability of Manila’s airport to expand to meet expected demand.
Clark Airport officials are also in favor of President Arroyo’s
signing of Executive Order 500B, liberalizing the air industry.

AOL, A MODEL U.S. EMPLOYER
————————–

¶9. (SBU) The Charge met with AOL’s Director of Call Center
Operations, Doreen Thibodeaux at AOL’s Clark site located in the
former communications bunker of Clark Airbase. AOL is a global web
services company and advertising network in the United States.
Clark-based AOL Member Services, established in 1998, has 1000
employees and provides live chat and email support to 23.5 million
AOL members. Under the direction of Ms. Thibodeaux, AOL has become
a model employer. Already known for its excellent employee training
programs, AOL also provides on site gym facilities and medical staff
initiating programs to improve overall employee health and 24 hour
meal service. AOL employees conduct community outreach programs, in
one case, eliminating a scabies outbreak at a local orphanage. As a
result of building a corporate community, AOL has a high retention
rate, high employee satisfaction, and high customer service
satisfaction ratings. Although the decision has not been formally
announced, Director Thibodeaux confided that AOL will outsource its
Philippine operations to E-Telecare, but that it expects its
existing workforce to remain intact.

THE KEEPER OF THE FLAME
———————–

¶10. (U) Honoring shared U.S.-Philippine history, Clark Development
Corporation established the superb Clark Museum in the former base’s
finance building in 1997. Clearly a point of pride to the local
community, the museum houses historical photographs and memorabilia
from the air base as well as local historical material. Its
engaging curator — well-known in Clark as the “Keeper of the Flame”
— served as community relations advisor to every U.S. commander at
Clark since 1949.

LOCAL MEDIA FRIENDLY AND SUPPORTIVE
———————————–

¶11. (U) The Charge used a live radio interview on a popular show to
convey the positive role of U.S. business in the Clark region,
through companies like Texas Instruments, AOL, UPS, and Sutherland.
The Charge also highlighted U.S. government programs, such as the
USAID funded family health clinic in Angeles and the numerous Peace
Corps workers in the area.

¶12. (U) A local media organization also hosted a roundtable
question and answer session with the Charge. Members included
representatives from print, radio, and television. Questions
focused on three areas. Will more U.S. businesses invest in the
area? Will the U.S. remain the Philippines’ number one trading
partner? What will U.S. government do for Amerasians (referring to
mixed race children of American service members and local Filipinos
living in the area)? The Charge reaffirmed American-Filipino trade
links and said that he expected U.S. firms to be interested and
competitive in bidding on investment opportunities in the region and
country in general. He again cited various U.S. government and
non-governmental projects in the country as well as citing AOL and
Texas Instruments as examples of American business involvement.

¶13. (U) Texas Instruments groundbreaking and the Charge’s
appearances were widely covered in local and national media. We

MANILA 00003160 003 OF 003

successfully conveyed continuing U.S. interest in the Clark and
Subic region, which reassures very pro-U.S. communities. We also
conveyed the positive role U.S. business plays in providing economic
opportunities and social responsibility projects throughout the
Philippines.

KENNEY

   

 

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