VZCZCXRO1956
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #4846/01 3332355
ZNR UUUUU ZZH
O 292355Z NOV 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4104
INFO RUEHZS/ASEAN COLLECTIVE IMMEDIATE
RHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATE
RUEKJCS/JOINT STAFF WASHINGTON DC IMMEDIATE
RHHMUNS/COMSOCPAC HONOLULU HI IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 04 MANILA 004846 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP, S/CT, PM, INR/EAP, AND EAP/MTS 
USPACOM ALSO FOR FPA HUSO AND J5 
SECDEF/OSD/ISA/AP (TOOLAN/BAILEY) 
JOINT STAFF/J5 (WILKES/ROBINSON/CLEMMONS) 
AID/W FOR ANE/EAA PHILIPPINE DESK OFFICER CALISTA DOWNEY 
 
E.O. 12958: N/A 
TAGS: PREL PTER MOPS MCAP EAID EFIN PGOV RP
SUBJECT: FOCUS ON USG-GRP DEVELOPMENT PARTNERSHIP IN MINDANAO: GRP 
SECRETARY OF SOCIO-ECONOMIC PLANNING TRIP WITH USAID DIRECTOR 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED; PLEASE HANDLE ACCORDINGLY 
 
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SUMMARY 
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¶1.  (U) Embassy Manila continues to engage actively in demonstrating 
substantial USG support for improved conditions for peace, security 
and development in conflict-affected areas of Mindanao. During a 
substantive two-day visit to Mindanao beginning on Thanksgiving Day, 
of GRP cabinet member, Secretary of Socio-Economic Planning, Romulo 
¶L. Neri and USAID/Philippines Director Jon D. Lindborg, the 
U.S.-Philippines partnership for peace and development in Mindanao 
was reaffirmed with the GRP expressing a strong interest in 
replicating similar programs in Mindanao.  Secretary Neri and 
Director Lindborg led a group of GRP and USAID officials and staff 
in visiting various projects jointly undertaken by the USG and the 
GRP and other development partners, where they were impressed by the 
gains of peace and accelerated economic growth in Mindanao.  The 
party visited communities in the Autonomous Region in Muslim 
Mindanao (ARMM) and other conflict-affected areas.  The party also 
visited ARMM headquarters and the Office of the International 
Monitoring Team and met with media at the end of the visit. 
Secretary Neri commended the USG for "being very brave" in engaging 
 
SIPDIS 
in catalytic, high-impact and cost effective programs in Mindanao's 
conflict affected areas, and for setting a development agenda that 
is fully consistent with GRP priorities, while representing "value 
for money."  End Summary. 
 
------------------------------------------ 
INFORMING GRP OVERSIGHT OF DONOR ASSISTANCE FOR INCREASED 
COLLABORATION 
------------------------------------------ 
 
¶2.  (U) From November 23-25, 2006, GRP Secretary of Socio-Economic 
Planning Romulo Neri and Mission Director Jon Lindborg and other GRP 
and USAID officials visited USAID-assisted programs in the cities of 
Davao, Kidapawan and Cotabato, and the provinces of North Cotabato 
and Maguindanao. Secretary Neri is also the Director General of the 
National Economic and Development Authority (NEDA), the GRP agency 
mandated to exercise oversight of official development assistance to 
the Philippines.  As the USG is the donor with the largest on the 
ground presence in Mindanao, USAID and NEDA had agreed in recent 
consultations that joint monitoring visits to Mindanao would be 
useful.  This visit is the NEDA Director General's first to USAID 
assisted programs in Mindanao and only his second to Mindanao in 
¶2006.  The Party also visited ARMM headquarters for briefings on 
programs for health services delivery improvement, internally 
displaced persons and environmental governance.  Also joining the 
GRP's party was a representative of the Mindanao Economic 
Development Council (MEDCO), a GRP agency tasked to promote and 
coordinate the active participation of all sectors to effect the 
socio-economic development of Mindanao 
 
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DAVAO CITY THANKSGIVING DINNER WITH LOCAL LEADERS 
----------------- 
 
¶3.  (U) Davao City local leaders from the business and education 
sectors exchanged views with Secretary Neri on trends and issues in 
their sectors.  The leaders noted the increasing prospects for 
trade, especially with respect to niche markets for agricultural and 
other exports to China and issues in education sector, such as, 
declining enrolment in tertiary education and the deterioration in 
English proficiency.  Secretary Neri noted that USAID has been very 
supportive of GRP's initiatives to increase the cadre of development 
workers in Mindanao, including those in the public sector 
bureaucracy, business managers, and development workers in the 
field.  He noted the increasing atmosphere of peace and 
collaboration in the Muslim areas and the reduction in poverty in 
some of the poorest provinces. Still, some of the provinces in the 
ARMM have the worst performance in health and education indicators. 
Secretary Neri stated that a development model for high potential 
 
SIPDIS 
but very poor areas in Mindanao is needed, and this model should 
focus on improving productivity and capacity building. 
 
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BRIEFING ON USAID'S GROWTH WITH EQUITY IN MINDANAO (GEM) PROGRAM 
---------------------------------------- 
 
MANILA 00004846  002 OF 004 
 
 
 
¶4.  (U) On November 24th in Davao City, Secretary Neri was joined by 
Secretary Datu Zamzamin Ampatuan, Administrator of the Southern 
 
SIPDIS 
Philippines Development Authority, and Chairman Ali Sangki of the 
Al-Amanah Islamic Investment Bank of the Philippines at the Growth 
with Equity in Mindanao (GEM) Program office for a breakfast 
briefing on the GEM program. USAID's flagship activity in Mindanao 
since 1996, GEM is an umbrella program under which USAID is able to 
support a wide range of activities, including small infrastructure 
projects, livelihood assistance to former MNLF combatants, 
strengthening of business organizations, and opening international 
markets for Mindanao products -- all intended to contribute to peace 
and development in Mindanao. 
 
¶5. (U) Secretary Neri noted that cost estimates for GEM's 
infrastructure projects seem much more reasonable than equivalent 
projects implemented by the GRP and asked for cost information to 
provide examples to the GRP's Department of Public Works and 
Highways.  He also concurred with GEM's approach to economic 
development which veers away from traditional livelihood projects 
and focuses more on catalytic infrastructure such as post harvest 
facilities, food processing and packaging.  He noted that GEM has 
correctly focused its business facilitation assistance on export 
markets of greatest opportunity.  Sec. Neri expressed interest in 
knowing more about and promoting GEM assistance to fish cage 
technology. He also expressed interest in the occupational placement 
of the interns under the GEM Congressional Internship Program for 
Young Muslim leaders, and in exploring USAID support for addressing 
land access issues under vestiges of a feudal system and development 
or review of the master plan for Liguasan Marsh. 
 
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VISIT TO EDUCATION ACTIVITIES 
--------------------------------------- 
 
¶6.  (U) In Kidapawan City, Secretary Neri and Director Lindborg 
turned over a package of seven computers, internet connections and 
resource materials to the Manongol National High School. Through 
this USAID GEM activity, students establish email accounts, 
communicate with other students throughout the world and conduct 
research on various academic topics. Teachers enhance the students' 
learning experiences by augmenting classroom lessons with additional 
materials obtained from the internet. As of November 20, 2006, this 
program has assisted 455 schools in the Autonomous Region in Muslim 
Mindanao and other conflict-affected areas, benefiting more than 
400,000 students and about 12,000 teachers.  Secretary Neri remarked 
that the project is needed in an environment that is increasingly 
knowledge based, and that it is important for attaining progress and 
greater productivity.  He also saw opportunities in linking this 
activity with the best teachers in the country and in its 
replication using Chinese ODA which is supporting similar 
initiatives. 
 
¶7.  (U) In Midsayap, North Cotabato, the party turned over math and 
science kits and learning materials to a community learning center 
and visited an out-of-school youth training and an on-the-job 
training site under USAID's Education Quality and Access for 
Learning and Livelihood Skills (EQuALLS) Program and implemented by 
the Save the Children Federation (SCF).  The community learning 
center provides basic and alternative education and assistance in 
youth productivity and introduced its current batch of graduates 
scheduled for certification.  A 25-year old graduate of the program 
gave a testimony indicating that dropping out of school is not an 
excuse for not learning and expressed her increased optimism in 
moving on. 
 
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TURN OVER OF RURAL ELECTRIFICATION AND SMALL INFRASTRUCTURE PROJECTS 
 
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¶8.  (U) In Pagalungan, Maguindanao province, the party participated 
in a symbolic turnover of an energized village to the province, 
visited an electrified household and installed a marker 
commemorating the electrification of 1,140 households in the 
province. These are achievements of USAID's Alliance for Mindanao 
Off-Grid Renewable Energy (AMORE) Program.  Residents of the 
electrified household thanked USAID for making possible a number of 
night-time productive activities, such as studying for school. 
 
MANILA 00004846  003 OF 004 
 
 
 
¶9. (U) In Midsayap, the party formally turned over the Midsayap 
Trading Center to the village (Barangay Poblacion 5) and the 
Municipal Government of Midsayap.  Secretary Neri commended USAID 
for having well prioritized and selected projects which are 
relatively inexpensive and have high impact.  He suggested that 
other donors which have more resources for infrastructure might 
follow the USAID model. Under the GEM Program, USAID is financing 
the construction of 815 "barangay infrastructure projects" and up to 
40 "regional impact projects" in the Autonomous Region in Muslim 
Mindanao (ARMM) and other conflict-affected communities. 
 
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COTABATO CITY DINNER WITH LOCAL LEADERS AND IMPLEMENTING PARTNERS 
 
--------- 
 
¶10. (U) Participants exchanged views and updates on peace and 
development issues.  Cotabato City Mayor Sema talked about education 
as his priority concern and a community center that USAID will 
support.  Bangsamoro Development Agency Executive Director, Dr. 
Danda Juanday, indicated his agency's engagement with World Bank 
support in capacity building in six pilot areas in preparation for 
the Peace Agreement and expressed optimism that the agreement will 
come through. 
 
¶11. (U) Secretary Neri responded to a number of questions pertaining 
to NEDA's role in planning activities related to the peace process, 
the need to improve ARMM capacity to generate its own resources and 
manage its own development programs, that ARMM and the GRP more 
appropriately should address education infrastructure finance issues 
rather than rely on donors, and that deterioration in the quality of 
education can be partially arrested through telecommunications. 
Secretary Neri again commended USAID for having "very good, 
 
SIPDIS 
community based interventions." 
 
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NOVEMBER 25TH BRIEFING AT ARMM HEADQUARTERS ON DEVELOPMENT ISSUES 
--------- 
 
¶12. (U) On health services, Secretary Neri observed the dismal state 
of the ARMM health situation and upon learning that the ARMM budget 
was quite low, immediately called by mobile telephone the Secretary 
of Budget and Management, with a request to double the ARMM health 
budget.  He also remarked that resources for family planning might 
be better channeled to the ARMM. 
 
¶13. (U) On environmental governance, Secretary Neri advised 
increasing focus on reforestation through species where the 
incentive is not to cut the trees down, such as fruit trees and 
rubber.  Also noted was the need to clarify property rights in 
public land which has no forest cover. 
 
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BRIEFING AT INTERNATIONAL MONITORING TEAM HQ 
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¶14.  (U) The IMT, composed of Malaysia, Brunei, and Libya, has been 
operating in Mindanao since October 2004, after the Government of 
the Republic of the Philippines (GRP) and the Moro Islamic 
Liberation Front (MILF) signed the ceasefire agreement in July 2003. 
 The members of the IMT, in conjunction with the joint GRP - MILF 
Committee have visited various areas throughout Central Mindanao, 
Zamboanga Peninsula, and the province of Basilan in order to monitor 
the progress of the peace talks, rehabilitation efforts, and 
economic development in the MILF conflict affected areas. They also 
evaluated reported "violations" of existing ceasefire agreements. 
With a membership of about 60 people, the IMT's headquarters is 
located in Cotabato City, while each of its five Team Sites is 
located in the cities of Cotabato, Iligan, Zamboanga, General 
Santos, and Davao. The IMT's jurisdiction covers 14 of Mindanao's 21 
provinces.  Recently, the Government of Japan joined the IMT, 
dispatching an expert who would focus on socio-economic monitoring 
and take an active role in the formulation and implementation of an 
economic development plan for the area.  Director Lindborg pledged 
continued USG collaboration with the IMT. 
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MEETING WITH MEDIA IN COTABATO CITY 
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MANILA 00004846  004 OF 004 
 
 
¶15.  (U) In a final meeting with local media in Cotabato City, 
Secretary Neri and Director Lindborg highlighted the opportunities 
 
SIPDIS 
for development throughout Mindanao with an improving environment 
for peace and security. 
Director Lindborg noted the USG's substantial commitment to Mindanao 
with a range of diplomatic, defense and development cooperation 
activities, as well as frequent visits of senior USG officials, 
including the most recent visit of Ambassador Kenney on Thanksgiving 
Day and DCM Jones party's meetings with MILF leadership the week 
before. 
 
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COMMENTS 
-------- 
 
¶16.  (SBU) As the principal GRP counterpart for USAID's enabling 
agreements for assistance to the Philippines, it is important to 
strengthen the relationship with NEDA and its Director General, who 
is also one of President Arroyo's senior economic advisers.  The 
trip appears to have left a lasting favorable impression on 
Secretary Neri on how the USG works in close partnership with the 
 
SIPDIS 
GRP and how the USG is using defense, diplomacy and development 
instruments to transform the environment for peace and development 
in Mindanao.  He publicly acknowledged the USG's niche in the 
development assistance community as well as its catalytic role in 
helping promote sustainable development, and would like to 
specifically replicate USAID approaches among the broader donor 
community, as well as, the development programs implemented by the 
national government and the local governments.  KENNEY