VZCZCXRO1201
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #2539/01 1670912
ZNR UUUUU ZZH
O 160912Z JUN 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1558
INFO RUEHZS/ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 03 MANILA 002539 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/EP 
STATE FOR EB/CBA NSMITH-NISSLEY 
STATE ALSO PASS EXIM, OPIC AND USTR 
TREASURY FOR OASIA 
 
E.O.  12958:  N/A 
TAGS: BEXP EINV ELAB ETRD KSEP SENV RP
SUBJECT:  NOMINATION FOR CORPORATE EXCELLENCE AWARD: PROCTER 
& GAMBLE PHILIPPINES 
 
REF:  STATE 64726 
 
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NOMINATION 
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¶1.  Post is pleased to nominate Procter & Gamble (P&G) 
Philippines for the 2006 Award for Corporate Excellence 
(ACE).  P&G Philippines has energized its workers with a 
spirit of social responsibility and philanthropy that makes 
an excellent representation of American values and character 
to the local business community.  P&G traces its 
manufacturing roots in the Philippines back to 1935 when its 
Manila investment became the first P&G plant in Asia.  Today 
P&G Philippines, a market leader in consumer categories for 
detergent, soaps, diapers, dishwashing liquid, and paper 
products, boasts 1,000 direct employees with assets of $10 
billion in the Philippines.  The company is dedicated to 
improving the quality of life for Filipinos through programs 
to revitalize poor communities, donate educational 
resources, promote healthier lifestyles and support the 
local economy with job creation initiatives. 
 
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GOOD CORPORATE CITIZENSHIP: Community, Education and Health 
--------------------------------------------- -------------- 
 
¶2.  Revitalizing Communities:  P&G is working with the 
charity organization "Providing Care" (Gawad Kalinga) to 
construct housing and contribute educational resources for 
impoverished Filipinos living in slums.  In 2004, P&G 
sponsored the construction of the first Procter & Gamble 
village representing 48 new homes in an impoverished area of 
metro Manila.  As momentum and enthusiasm for the program 
spread throughout the company, individual P&G employees 
decided to contribute to the effort by giving up a day's 
salary to fund more houses.  P&G instituted a matching 
program for such employee contributions.  In 2005 P&G 
donated funds to build another 70 homes.  In addition, P&G 
employees opted to give up their 2005 Christmas party at a 
four-star hotel in favor of channeling the budget funds to 
build even more homes for the poor.  Over the past three 
years P&G Philippines and its employees have contributed USD 
170,000 to build 120 homes for needy families.  Though the 
alliance with P&G and "Providing Care" began in the 
Philippines, the concept has spread throughout the P&G 
corporate network.  "Providing Care" now receives donations 
from P&G employees around the world.  P&G employees are also 
encouraged to participate in the construction of the houses 
and are excused from work to do so on pre-designated 
occasions. 
 
¶3.  Supporting Education:  P&G Philippines supports a Live, 
Learn, and Thrive (LLT) program in each P&G village to 
provide free pre-school services for children up to six 
years old.  P&G donates five centavos (about nine cents) of 
every consumer purchase of Safeguard White to support the 
ongoing operations of the LLT centers.  P&G also supports 
education for the 7-13 age groups by donating uniforms and 
school supplies to students. 
 
¶4.  P&G Philippines also designed the Sagip-Isip program to 
aid the Philippines' public school system, which lacks 
resources.  P&G Philippines partnered with the local 
Microsoft Corporation to provide modern technological 
equipment to schools.  Participating schools collect P&G 
product labels and exchange them for educational equipment 
like computers, software, audio-video showcases, books, and 
educational tapes.  These resources greatly enhance the 
learning environment in participating schools throughout the 
Philippines. 
 
¶5.  Health Initiatives:  P&G is a long-time advocate for the 
promotion of good health and hygiene practices.  In 2002 
company employees volunteered their time to participate in a 
"Two Steps to Good Health" campaign in which they traveled 
to cities including Cebu, Bacolod, Iloilo, Cagayan de Oro, 
and Davao to put on skits and hold training seminars for 
elementary children and their parents on the importance of 
hygiene and how it protects against disease. 
 
¶6.  In February 2006, the company organized and hosted the 
2nd International Health and Hygiene Symposium.  The two-day 
seminar gathered 150 hygiene experts from around the world 
to discuss cleanliness and hygiene measures that can be used 
to fight disease. 
 
 
MANILA 00002539  002 OF 003 
 
 
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GROWTH AND DEVELOPMENT OF THE LOCAL ECONOMY 
------------------------------------------- 
 
¶7.  Management of P&G Philippines is focused on job creation 
as a means to stimulate the local economy and has identified 
creative ways to bring jobs to the Philippines.  P&G 
Philippines has identified more than 7,000 new employment 
opportunities for local workers through direct and indirect 
hiring practices.  The jobs include direct sales, marketing 
and packaging positions as well as IT support and human 
resource management positions through American business 
process outsourcing providers with operations in the 
Philippines.  The company also moved its Shared Service 
Center to the Philippines to centralize accounting work for 
the P&G network in Asia.  P&G Philippines successfully 
lobbied to set up a Pampers diapers manufacturing facility 
in the RP.  Production of the diapers will bring revenue of 
$7 million to the local economy.  P&G has further invested 
$30 million in its manufacturing plant in Laguna to make the 
Philippines a major manufacturing and service hub for P&G in 
Asia. 
 
------------------------------ 
EXEMPLARY EMPLOYMENT PRACTICES 
------------------------------ 
 
¶8.  P&G Philippines offers a generous compensation package 
to its employees including free P&G products, shuttle 
service, meal allowances, rice subsidies, the opportunity to 
apply for loans towards the purchase of a car or a house and 
competitive wages based on a 15.5-month year.  Note. 
Philippine law requires employers to pay workers for an 
extra "13th month" as a bonus.  P&G's standard of an 
additional 2.5 bonus months beyond its legal obligation is 
quite generous.  End note.  The company places itself among 
the top ten percent of employers in terms of salary levels. 
Employees are also given stock in the company.  Managers 
point out that one of P&G's founders, William Cooper 
Procter, noted "when employees become shareholders, their 
interests and the interests of the company become 
inseparable." 
 
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ENVIRONMENTAL STEWARDSHIP 
------------------------- 
 
¶9.  P&G Philippines holds environmental stewardship as an 
important responsibility.  P&G was one of the first 
companies in the RP to switch from using hard Alkyl Venzene 
(AV) to soft AV in its soaps because the hard AV was not 
biodegradable.  P&G was an early adopter of the change, 
which it implemented ahead of legislation which later 
required companies to use non-toxic ingredients. 
 
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COMPETITIVE AND INNOVATIVE ACTIVITIES 
------------------------------------- 
 
¶10.  P&G has reaped the benefits of an innovative marketing 
strategy which is carefully tailored for Filipino consumers 
by targeting low income households and offering single-use 
("sachet") packets of product.  The small quantity makes the 
product affordable for consumers on a tight budget, who do 
not have the disposable income to buy in bulk.  The product 
line also makes adjustments for local culture and 
infrastructure.  For example, P&G manufactures a bar soap 
for pre-treating laundry in consideration of the tradition 
of hand washing in which bar soap is rubbed onto clothing. 
In addition, Tide detergent is tweaked for efficiency in the 
country's hard water conditions. 
 
¶11.  P&G headquarters selected the Philippines as the new 
manufacturing site for Pampers diapers in part because of a 
new technology developed by the P&G Philippines branch.  The 
technology is being reviewed by the Department of Science 
and Technology which may grant special status to the 
innovative project. 
 
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COMPLIANCE WITH U.S., INTERNATIONAL, AND LOCAL LAWS 
--------------------------------------------- ------ 
 
¶12.  Values are at the core of the Procter and Gamble 
Company.  Integrity, honesty, respect for individuals, and 
"doing what's right" guide the staff in their everyday 
work.  P&G Philippines has resisted the local practice of 
 
MANILA 00002539  003 OF 003 
 
 
offering bribes as a means to move products through customs. 
P&G managers revealed to Econoffs that they had once 
dismissed an employee who had paid a bribe to expedite 
customs clearances.  The company has established a zero 
tolerance policy for corruption and requires its employees 
to respect a high standard of ethical conduct. 
 
KENNEY