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O 130845Z DEC 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4254
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UNCLAS SECTION 01 OF 02 MANILA 004977 
 
SIPDIS 
 
SIPDIS 
FOR PEACE CORPS, USAID 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD EINV EAID PGOV CVIS MASS SCUL KPAO
RP 
SUBJECT: BAGUIO WELCOMES US AID, INVESTMENT, AND INTEREST DURING 
AMBASSADOR'S VISIT 
 
REF: MANILA 4954 
 
¶1.  SUMMARY:  The signing of a USAID-funded healthcare grant and a 
speech at the Philippine Military Academy (PMA) anchored the 
Ambassador's fourth visit to Baguio, the former summer capital of 
the Philippines under U.S. administration.  Visits to a local 
American company and conversations with local leaders emphasized 
Baguio's importance as a commercial, educational and military hub 
for the Philippines, but also highlighted common local concerns 
about unchecked growth and infrastructure strain.  END SUMMARY. 
 
¶2.  The Ambassador visited Baguio December 8-9, returning to the 
former summer capital of the Philippines during American government. 
 Baguio remains the Philippine Presidential retreat, and its 
plethora of universities and corporations ensures that Baguio, now a 
city of 300,000 people, is a frequent stop for Filipinos from all 
segments of society.  The surrounding province of Benguet is the 
agricultural pantry for metropolitan Manila and an important mining 
area; Baguio is the administrative capital for the Cordillera 
Administrative Region, home to many indigenous tribes.  The Embassy 
maintains a facility in Baguio, and USG involvement centers on 
frequent visits to PMA, Peace Corps volunteers working in education, 
and USAID assistance, primarily focused on health care and 
environmental protection.  The Embassy has also created American 
Corners in the Baguio City Public Library and the PMA library, and 
an American Studies Resource Center at St. Louis University, and 
frequently sends visiting speakers to those institutions.  American 
companies, including Texas Instruments (see para 7) and Moog 
Controls, have taken advantage of the educated workforce and the 
special export processing zones to locate high-quality manufacturing 
centers in Baguio. 
 
----------------------------------------- 
CONTINUED USG SUPPORT FOR SOCIAL SERVICES 
----------------------------------------- 
 
¶3. The Ambassador kicked off her visit December 8 by witnessing the 
signing of a 3.6 million peso (approximately USD 72,800) grant from 
USAID's Private Sector Mobilization for Family Health (PRISM) 
project to two Baguio grantees, the Baguio Center for Young Adults 
(BCYA) and the Jaime V. Ongpin Foundation, Inc. (JVOFI).  The two 
grantees will use the funding to help ten Baguio companies set up 
workplace health programs focusing on maternal, child and family 
health, and provide micro-finance services to 50 midwives to expand 
their practices and educate clients in family and reproductive 
health.  The grant signing continued USAID support for both BCYA and 
JVOFI; BCYA was founded in 1985 by a USAID grant, and JVOFI 
transitioned from a corporate-funded institution to a private 
foundation with the assistance of USAID funding. 
 
------------------------------------ 
TURBULENT POLITICS AND GROWING PAINS 
------------------------------------ 
 
¶4. In a December 8 meeting, Baguio Bishop Carlito Cenzon described 
for the Ambassador the one-year suspension of the mayor in June 2006 
for advocating a citizen rebellion against a for-profit 
pay-for-parking scheme that was embroiled in accusations of 
corruption.  The acting mayor, Cenzon observed, was honest but "too 
young" to accomplish anything in the year he will serve in office. 
Cenzon outlined a role for himself as the "honest broker" who can 
mediate between feuding local parties, hewing to a traditional role 
for the Filipino clergy. 
 
¶5.  Cenzon noted that the Catholic Bishops' Conference of the 
Philippines (CBCP) had charged all Bishops with rallying their 
flocks against the proposed constituent assembly to revise the 
Philippine Constitution (reftel).  Cenzon said that he had planned a 
prayer rally, but worried that other protestors might be more 
"violent."  Cenzon's most pressing concerns were the general apathy 
among citizens to get involved in civic life, unemployment, and a 
growing black market economy, which he blamed on recent Muslim 
immigrants to the region. 
 
¶6.  Finally, Cenzon noted that Baguio City had just kicked off its 
1000-day centennial celebration, to culminate in 2009, and suggested 
that the USG should participate in (and possibly help fund) the 
festivities in light of US involvement in Baguio's founding.  Guests 
at the Ambassador's residence for dinner on December 8, including 
Congressman Mauricio Domogan and Acting Mayor Reinaldo Bautista Jr. 
seconded the Bishop's request for Embassy participation in the 
centennial celebrations, and confirmed his observation that 
unemployment was a pressing issue.  Environmental degradation, 
overpopulation, and inadequate infrastructure rounded out their top 
concerns for Baguio residents.  The local leaders and businesspeople 
present suggested increased Consular outreach in Baguio to demystify 
the visa process and facilitate business and educational travel to 
 
MANILA 00004977  002 OF 002 
 
 
the United States. 
 
--------------------------------------- 
US FIRMS FIND BAGUIO IDEAL FOR BUSINESS 
--------------------------------------- 
 
¶7.  The management of Texas Instruments (Philippines), Inc. (TIPI) 
briefed the Ambassador on their Baguio operations and showed her 
TIPI's USD 1 billion semiconductor manufacturing facility in the 
Philippine Export Zone Authority (PEZA) located in Baguio.  TIPI 
employs approximately 2,300 local employees (counting only three 
expatriate Americans among its staff), and has become the 
Philippines' largest exporter, with a 2005 export value of USD 2.9 
billion.  TIPI management noted that the high education levels and 
good English skills of local employees, and the low-tax regime in 
the PEZA, help make TIPI the highest-productivity overseas plant for 
Texas Instruments.  TIPI officials stated that they had no problems 
to report, and are currently expanding their manufacturing 
facilities to fully utilize the available space in the PEZA.  Steven 
Leece, the Managing Director of Moog Controls Corp. Philippines, 
attending the Ambassador's dinner on December 8, echoed TI's 
satisfaction with its location in the Philippines, noting that Moog 
hopes to double its facilities in the PEZA in the coming year. 
 
-------------------- 
EAGER MEDIA COVERAGE 
-------------------- 
 
¶8.  The Ambassador taped a television interview with ABS-CBN News on 
December 8 and visited DZWX Bombo Radyo on December 9 for a live 
interview.  In both interviews, the Ambassador highlighted the 
strong relationship between the two nations, USG assistance to 
Baguio and the surrounding region through Peace Corps and USAID 
projects, and the employment benefits of American companies in the 
area.  The interviewers reiterated local interest in USG 
participation in Baguio's centennial celebrations, and discussed the 
ongoing controversy over the continued detention of a U.S. Marine in 
a Philippine prison in violation of the U.S.-Philippines Visiting 
Forces Agreement (VFA).  During media interactions at the 
Ambassador's public events, the Ambassador expressed hope that the 
Marine would be returned to U.S. military custody at the American 
Embassy, consistent with GRP and USG agreement on this issue. 
 
--------------------------------------------- --- 
TROOPING THE LINE AT PHILIPPINE MILITARY ACADEMY 
--------------------------------------------- --- 
 
¶9.  Philippine Military Academy Superintendent MGEN Leopoldo 
Maligalig and PMA staff briefed the Ambassador on December 9 about 
ongoing reforms to modernize PMA's curriculum and facilities to 
better prepare Cadets for leadership roles in the Armed Forces of 
the Philippines (AFP).  Maligalig said that AFP reform efforts, 
strongly supported by JUSMAG Philippines, can "only go up," and that 
all PMA staff have adopted as a joint vision the ten-year Philippine 
Defense Reform roadmap signed last year by the Defense Secretary. 
Maligalig observed that he was drawing heavily on practices and 
curriculum of the United States Military Academy and the United 
States Naval Academy, adding that joint training and educational 
exchanges with US military institutions have been crucial to his 
reform efforts. 
 
¶10.  Following the briefing and tour, PMA hosted the Ambassador as 
its Honored Guest at the end-of-term Cadet parade, and she addressed 
the Cadets and media at a formal speech following the parade.  In 
her remarks, the Ambassador emphasized the vital role of the AFP in 
meeting terrorist, natural disaster, disease, and community-building 
challenges in the Philippines, and exhorted the Cadets to fulfill 
their roles as military leaders honorably under a constitutional 
system of civilian control. 
 
KENNEY