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O 130536Z NOV 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3874
RUEHZS/ASEAN COLLECTIVE IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MANILA 004666 
 
SIPDIS 
 
SIPDIS 
TOPEC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EAID RP CMGT
SUBJECT: DCM HIGHLIGHTS US ENGAGEMENT IN PHILIPPINE'S SECOND CITY 
AND HOST OF DECEMBER ASEAN, EAS SUMMITS 
 
¶1.  SUMMARY.  DCM Jones highlighted U.S. business, USAID and Peace 
Corps involvement in the central Philippine port city of Cebu on 
October 27.  Together with Commercial Counselor and Cebu Consular 
Agent, DCM met with local business, religious, and political leaders 
in the Philippines' "second city" which will host the ASEAN and East 
Asia Summits on December 10-14.  The visit received significant 
local media coverage and follows two recent trips by the Ambassador 
to the city, underlining the importance of Cebu and the Visayas to 
U.S.-Philippines relations.  END SUMMARY. 
 
¶2.  The DCM began the visit by touring Fairchild Semiconductor to 
highlight the increased investments of U.S. businesses in Cebu. 
Fairchild Semiconductor, a Maine-based leading manufacturer of 
integrated circuits, became one of the first companies to locate at 
Mactan Economic Processing Zone in 1979.  Starting with less than 
500 employees, the company today employs over 1,600 local staff and 
has expanded its operations to include a testing facility.  Other 
American companies, including Timex and Lexmark, have similarly 
expanded their investments in Cebu by opening R&D and distribution 
centers.  These manufacturers are being joined increasingly by call 
centers including Convergys and Sykes Asia, a company that will be 
augmenting its 1,500-seat center with a brand new 2,000-seat 
facility. 
 
¶3.  After a visit to the U.S. Consular Agency in Cebu to review 
operations and meet staff, the DCM hosted a business luncheon. 
There he heard from local and American businesspeople who described 
the opportunities and challenges of doing business in Cebu.  They 
stated that misperceptions from abroad about the security situation 
in Cebu were constraining foreign investment.  Joel Yu, a business 
chamber president, noted that Cebu, a traditional trading center, is 
not as prone to political extremism and insurgency as 
agriculturally-based regions of the country.  The business leaders 
pointed out that skilled and relatively inexpensive local labor is 
the main attraction for foreign investment in Cebu.  Yet they noted 
that current IT education in Cebu is not adequate to meet the 
growing demands of businesses, despite several local colleges and 
universities. 
 
¶4.  The DCM also visited two Peace Corps Volunteers who converted an 
old provincial jail into a computer classroom where they teach 
college students how to deploy inexpensive computer technology in 
rural schools.  The volunteers showed how partnerships between NGOs, 
private businesses, and government can work together to address 
Cebu's business and development needs. 
 
¶5.  The DCM toured one of 137 franchised midwife clinics which USAID 
helped establish by providing the midwife entrepreneur with 
training, basic clinic equipment and marketing support.  USAID 
channeled its support to these midwives through non-government 
organizations that joined to form a private foundation in 2002. 
These midwife-owned franchises now employ, on average, two staff 
members and earn $400 to $1,200 per month.  The midwife owner of the 
clinic visited by the DCM noted that these clinic operations are an 
attractive alternative to seeking work abroad, as they provide an 
opportunity and an incentive to healthcare workers to remain in the 
Philippines and meet the health care needs in their communities, 
while earning a good living. 
 
¶6.  Cardinal Vidal, the Archbishop of Cebu, welcomed the DCM to his 
residence for a courtesy call and described the Catholic Church's 
efforts at educating the people about the electoral process.  The 
Church, through its parishes, conducts programs to inform the people 
about how elections are held and what they mean.  The DCM encouraged 
Vidal to speak out more forcefully against practices that encourage 
trafficking in persons, and commended his efforts against 
corruption. 
 
¶7.  In television interviews with the two major local networks, 
ABS-CBN and GMA-7, the DCM highlighted the above examples of U.S. 
engagement in Cebu and clarified the U.S. role in various regional 
forums in Asia.  He also dispelled persistent rumors about possible 
Presidential or Secretary of State attendance at the ASEAN Summit in 
December. 
 
¶8.  The DCM amplified the visit's message of engagement and 
partnership during a reception he hosted for over 100 local 
business, political, and community leaders.  Guests, including 
Congressman Raul Del Mar, Congresswoman Nerissa Soon Ruiz, and 
former Governor Lito Osmena, warmly greeted the U.S. Mission 
delegation and mentioned how they looked forward to more visits from 
the Embassy. 
 
 
KENNEY