VZCZCXRO1423
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #3143/01 2070931
ZNR UUUUU ZZH
O 260931Z JUL 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2195
INFO RUCPDOC/USDOC WASHDC
RUEHZS/ASEAN COLLECTIVE
RUEHLMC/MCC WASHINGTON DC

UNCLAS SECTION 01 OF 02 MANILA 003143 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/MTS and EAP/EP 
 
TAGS: EINV BEXP ETRD RP
SUBJECT: AMBASSADOR MEETS WITH PHILIPPINES-U.S. BUSINESS COUNCIL 
 
REF:  MANILA 2971 
 
MANILA 00003143  001.2 OF 002 
 
 
¶1.  Summary:  Ambassador Kenney and Emboffs met with members of the 
Philippines-U.S. Business Council on July 21 to discuss areas of 
cooperation between the U.S. and the Philippines, including 
agriculture, tourism, English language proficiency, regional hubs, 
and trade and investment.  The Ambassador highlighted Intellectual 
Property Rights (IPR) protection, agriculture, and the Millennium 
Challenge Corporation (MCC) anti-corruption initiative as areas for 
future collaboration.  End Summary. 
 
------------------------------------------ 
Philippines-U.S. Business Council 
------------------------------------------ 
 
¶2.  In a meeting with the Ambassador and Emboffs on July 21, members 
of the Philippines-U.S. Business Council highlighted areas of 
economic cooperation between the U.S. and the Philippines.  Members 
of this group are chief executive officers in Filipino corporations 
with close business ties to U.S. corporations.  The group is one of 
five business councils within the Makati Business Club, a prominent 
local organization that drew criticism from the government for 
expressing support of impeachment proceedings against President 
Arroyo in summer 2005. 
 
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Agriculture 
------------ 
 
¶3.  Council members complimented U.S. efforts to help the RP develop 
the mango industry, citing the U.S. decision to expand Philippine 
mango importation to Hawaii, the Marianas, and Guam.  Members also 
commended USDA assistance to mango growers outside Guimaras (the 
only island permitted to export mangos to the U.S.) in penetrating 
the U.S. mainland, the recent PL-480 loan to support biotechnology 
(see reftel), and USAID's GEM Program in Mindanao.  Council members 
were concerned about current U.S. tuna tariffs, noting that most 
tuna processors are based on Mindanao, and wondered if tariffs would 
adversely affect development in the region. 
 
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Tourism 
------- 
 
¶4.  The Council discussed the importance of tourism, as earnings 
from tourism comprise 4.9% of GDP and the sector employs 2.6 million 
people (0.7% of the national workforce).  Council members touted 
retirement tourism as a potential growth area due to the rapid 
increase in senior travelers, but this will depend on portability of 
health insurance and international accreditation of tourist 
facilities.  The Ambassador observed that the Filipino-Americans are 
a natural customer base, and encouraged promotion of other tourist 
areas besides beach resorts (such as mountains and rice terraces). 
The Council suggested that the U.S. travel advisory be 
destination-specific.  The Ambassador reminded Council members that 
the State Department has a responsibility to American citizens to 
provide the most accurate assessment of security concerns in the 
country. 
 
---------------------------- 
English Language Proficiency 
---------------------------- 
 
¶5.  Members expressed concern that Filipinos' English language 
ability, crucial to a highly qualified work force, has deteriorated 
over the past 13 years.  The Ambassador noted that while Peace Corps 
and USAID do provide English language training to teachers from 
Mindanao, education and cultural exchange programs sponsored by the 
Embassy's Public Affairs Section may provide additional nationwide 
support.  The Ambassador also encouraged the Council to have an open 
dialogue with the new GRP Secretary of Education and with English 
teaching departments in universities. 
 
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Regional Hubs 
------------- 
 
¶6.  The Council highlighted the potential for Clark and Subic 
Special Economic Zones to become regional air and seaport hubs, 
respectively.  Members discussed projects aimed improving 
infrastructure and access, and emphasized the importance of 
promoting Clark and Subic as investment locations for U.S. 
businesses. 
 
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Trade and Investment 
-------------------- 
 
¶7.  Council members noted a rapid expansion in the Philippine's 
business process outsourcing (BPO) industry, particularly in the 
 
MANILA 00003143  002.2 OF 002 
 
 
call center market.  The Ambassador stated that the call center 
industry provides a niche of opportunity due to Filipino enthusiasm 
for customer service, and noted increasing numbers of Filipino 
managers in call centers.  Members were concerned about new U.S. 
port regulations increasing security and inspection procedures for 
U.S.-bound shipments. 
 
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Concluding Remarks 
------------------ 
 
¶8.  The Ambassador concluded the meeting on a positive note by 
discussing future areas of collaboration among the U.S., GRP, and 
private business.  She underscored the GRP's improvements in IPR 
enforcement as positive for U.S. businesses based in the 
Philippines, and encouraged business leaders to work closely with 
the GRP on this issue.  The Ambassador applauded the collaboration 
between the U.S. and GRP on agriculture, citing the potential for 
growth, particularly in the tropical fruit sector, due to U.S. 
support for biotechnology development.  The Ambassador discussed the 
upcoming signing of the MCC Anti-Corruption Initiative in the 
Philippines and stressed the need for private businesses to support 
efforts against corruption.  The Ambassador emphasized the 
importance of working together to encourage the success of programs 
such as the MCC to achieve greater transparency in business and 
government.  The Council Chair cited the Coalition Against 
Corruption, a private organization promoting government 
transparency, particularly in customs and taxes. 
 
KENNEY