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O 010902Z MAR 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9662
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UNCLAS SECTION 01 OF 03 MANILA 000945 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, DRL/CRA, DS, CA 
 
E.O. 12958: N/A 
TAGS: PINS ASEC ECON RP
SUBJECT: SITREP 20:  PRESIDENT MULLS LIFTING OF STATE OF 
EMERGENCY 
 
REF: MANILA 942 AND PREVIOUS 
 
¶1.  (U) This message is Sensitive but Unclassified -- Please 
handle accordingly. 
 
¶2.  (SBU) Summary:  In a brief televised address mid-day on 
March 1, President Arroyo said she wanted to lift the State 
of Emergency at "the soonest time possible."  She asked for 
reports from key offices on the security situation within the 
next 24-72 hours before making a decision.  Manila remains 
calm, with no major demonstrations planned and no 
unauthorized troop movements.  Exiled Communist Party leader 
Jose Maria Sison has denounced the State of Emergency and 
called for increased attacks on the government.  The media 
continues to express fears about government censorship.  The 
peso and stock market are up.  The American Chamber of 
Commerce issued a statement on February 28 calling for the 
State of Emergency to be lifted as soon as possible.  The EAC 
next meets at 3:00 pm on March 2.  End Summary. 
 
--------------------------------------------- - 
Arroyo Speaks out on Ending State of Emergency 
--------------------------------------------- - 
 
¶3.  (U) At approximately 11:45 am on March 1, President 
Arroyo delivered a televised address (full text in Para 11) 
in which she said she would like to lift the State of 
Emergency at "the soonest time possible" in order to return 
to the administration's "primary mission" of strengthening 
the economy.  The President said she had requested reports 
about the "peace and order" situation from the Secretary of 
Justice, the Secretary of National Defense, and the Chief of 
Police, to be delivered within the next 24 to 72 hours.  She 
said that she would lift the State of Emergency when she is 
convinced that the government was in "full control" of the 
situation.  On February 28, Cabinet officials announced that 
they were planning to meet with the President on March 4 to 
discuss the possible lifting the State of Emergency 
(reftels).  On March 1, Vice President Noli de Castro told 
the press that, if it were up to him, the State of Emergency 
"would be lifted this week because the emergency has already 
subsided." 
 
¶4.  (SBU) Defense Secretary Cruz and AFP service chiefs plan 
to attend a meeting at Malacanang mid-morning on March 2, but 
have all accepted a mid-day invitation from Pacom's Admiral 
Fallon aboard the USS Essex. 
 
------------------- 
Manila Remains Calm 
------------------- 
 
¶5.  (SBU) The situation remained calm in Manila on March 1. 
No major demonstrations were reported during the day and 
schools and businesses remained open.  The AFP has reduced 
its presence around Malacanang Palace. 
 
---------------------------- 
Sison Calls for More Attacks 
---------------------------- 
 
¶6.  (U) In a March 1 statement, the founder of the Communist 
Party of the Philippines (CPP), Jose Maria Sison, denounced 
from his exile in the Netherlands the imposition of a State 
of Emergency and called for the New People's Army (NPA) to 
step up attacks against the government.  Sison said in a 
statement to news agencies that "all the patriotic and 
progressive forces" must "intensify all forms of struggle in 
order to oust the regime."  While denying allegations that 
the NPA had allied itself with any coup plotters in the 
Philippine military, he said "there is nothing wrong if, 
under certain conditions, the representatives of the CPP and 
any anti-Arroyo group in the military and police negotiate 
and make agreements for the benefit of the people." 
 
--------------------------- 
Press Criticizes Guidelines 
--------------------------- 
 
¶7.  (U) The media community is mostly united in its heated 
criticism of and of comments from GRP officials on 
"guidelines for proper and fair reporting."  Police Chief 
Lomibao addressed a large group of media at a press 
conference hosted by the Manila Overseas Press Club the 
evening of February 28 at which he said media coverage 
 
MANILA 00000945  002 OF 003 
 
 
"should not hurt the Philippine state by obstructing 
governance including hindering the growth of the economy and 
sabotaging the people's confidence in government and their 
faith in the future of this country.8  He also informed the 
media that security forces would "visit" broadcasters, but 
gave no further details on the nature of these visits.  The 
President's Chief of Staff Michael Defensor reassured the 
media that there are no plans to impose censorship.  Many in 
the media interpret the mixed signals as a call for 
journalists to engage in self-censorship, and many have 
commented on the "chilling effect" on journalism of the 
government's actions.  One broadcaster who attended the 
February 28 event described the situation as "surreal."  On 
March 1, the National Press Club held a small rally in Manila 
at which participants denounced GRP pressure on the media. 
 
-------------- 
Economy Upbeat 
-------------- 
 
¶8.  (U) On March 1, the peso was trading at slightly higher 
levels against the dollar than its close on February 28.  The 
Philippine Stock Price Index (Phisix) inched up for the third 
consecutive day.  The Phisix closed March 1 at a new 
three-week high of 2,135.27, having rebounded by a cumulative 
3.2% since February 27, more than making up for the 1% 
decline logged on February 24 following the declaration of a 
State of Emergency.  Foreign investor jitters at the opening 
of the current trading week -- evident from the 100.6 million 
peso ($1.9 million) net sell-off on February 27 -- also 
appear to be subsiding.  Securities traders commented that 
favorable 2005 corporate profit results and expectations that 
the President would lift the State of Emergency over the 
coming weekend boosted sentiment. 
 
---------------- 
AmCham Statement 
---------------- 
 
¶9.  (U) On February 28, the American Chamber of Commerce 
issued a press statement on the recent political events in 
which it regretted ongoing political instability and urged an 
"early and peaceful resolution within the rule of law, with 
full respect for civil rights."  AmCham noted that political 
stability is an essential requisite for a strong business 
environment and expressed the hope of the foreign business 
community that the State of National Emergency would be 
lifted "as soon as possible." 
 
--- 
EAC 
--- 
 
¶10.  (SBU) The next EAC is scheduled for 3:00 p.m. on March 
¶2.  The operations of the Crisis Management Center have been 
scaled back until 11:00 p.m. (local). 
 
¶11.  (U) The following is a translation of President Arroyo's 
public statement, delivered in Tagalog, at approximately 
11:45 am March 1. 
 
Begin text: 
 
My countrymen, thank you for the kind understanding of the 
many from our private and business groups in our move to 
defend our democracy from the threat of communist rebels and 
a few disillusioned soldiers with their political 
collaborators.  Your understanding and kind acceptance helps 
much to appease the situation.  The administration is 
determined to return to our primary mission -- to strengthen 
our economy, to lift the poor and to serve the needs of our 
citizenry.  Towards that goal, I would like to lift the 
proclamation of the state of emergency at the soonest time 
possible. 
 
I am requesting three reports to be submitted to me within 
the next 24 to 72 hours to study the security situation.  The 
Secretary of Justice will report to me about the moves for 
 
SIPDIS 
destabilization, the Secretary of Defense about military 
control, and the Chief of Police about the peace and order 
situation.  I will lift the state of emergency if I am 
convinced that each of these officials can assure me that we 
are in full control of the situation.  The administration 
moved to protect the safety and peace of our Republic and we 
will end the state of emergency when we can meet these 
 
MANILA 00000945  003 OF 003 
 
 
standards against destabilization, the armed forces, and rule 
of law. 
 
I am hoping that there will be more significant efforts to 
push these issues in the coming days.  Thank you again my 
countrymen and may God bless us. 
 
End text. 
 
Jones