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O 190612Z JUL 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7483
INFO RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEHZS/ASEAN COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 002422 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL CASC RP
SUBJECT: AMBASSADOR ENGAGES MILITARY, CIVIC AND COMMERCIAL LEADERS 
OF DAVAO AND DATU PAGLAS 
 
¶1. SUMMARY: On July 5 and 6, the Ambassador, JUSMAG, DAO and 
Commercial Counselor traveled to Davao, Mindanao. The visit 
highlighted the "one Mission" approach to Mindanao with military, 
commercial and public diplomacy outreach in the heavily-Muslim 
region where safety and security threats continue to limit outside 
involvement. The Ambassador visited sites in Davao and Datu Paglas 
including the Rotary Club of Davao, La Frutera, Inc. and the Bonawan 
Irrigation Structure. END SUMMARY. 
 
ORCHID CAPITAL OF THE PHILIPPINES 
-------------------------------- 
 
¶2. Known as the orchid capital of the Philippines, Davao is the 
commercial, agricultural, and tourism center of Mindanao.  The city 
of 1.3 million residents is the largest in the Philippines in terms 
of area.  The city's infrastructure is undergoing major 
modernization, but agriculture drives the economy.  Banana, coconut, 
pineapple and coffee products transit from the seaports in Davao to 
both domestic and foreign consumers. 
 
DATU PAGLAS 
----------- 
¶3. Datu Paglas is a Muslim town located in Maguindanao Province, 
internationally recognized as a model for transformation of conflict 
areas. Under its current mayor, the town transformed from a Moro 
Islamic Liberation Front (MILF) stronghold to a magnet for 
international investment. The mayor eradicated much crime and hired 
former guerillas to work at the local banana plantation, La Frutera, 
Inc.  The plantation receives funding from a number of foreign 
investors including Chiquita Unifrutti of Cincinnati. 
 
VISIT TO EAST MINDANAO COMMAND 
------------------------------ 
 
¶4. The Commander of Armed Forces of the Philippines (AFP) Eastern 
Mindanao Command briefed the Ambassador, JUSMAG, DAO, and JSOTF-P 
representatives at its temporary headquarters in Davao. AFP recently 
divided its Southern Command into Western and Eastern Mindanao 
Commands. Operations in the Western Mindanao Command (WESTMINCOM) 
focus on threats from Abu Sayyaf Group (ASG) and Jema'ah Islamiyah 
(JI) primarily in the Sulu Archipelago while Eastern Mindanao 
Command (EASTMINCOM) addresses threats from MILF splinter groups and 
the New People's Army (NPA). EASTMINCOM   stated that their goal is 
to eliminate the Communist Terrorist Movement (CTM) by 2010. 
 
¶5. The area remains dangerous due to insurgent activity although 
EASTMINCOM has succeeded in reducing enemy capabilities. In 
response, guerillas and splinter groups have increased attacks on 
soft targets in the area of operations. There have been 12 recent 
bombings in EASTMINCOM's area of responsibility, most recently the 
June 15th Weena bus bombing which left 8 dead and 19 injured. 
Officials believe the bus company's refusal to pay a "revolutionary 
tax" triggered the attack. Contacts within the local community also 
indicate that these attacks aim to disrupt the GRP-MILF talks and 
perhaps increase recruitment to the cause of the threat groups. 
 
¶6. According to the EASTMINCOM Commander, the greatest benefit of 
AFP's presence is the reduced ability of the threat groups to 
communicate. They have difficulty meeting in person or ingratiating 
themselves with locals, and usually forced to communicate only by 
mobile phone. When questioned, the Commander stated that there is no 
evidence that the MILF has recently received foreign support or 
arms.  He also noted that because the NPA continues to finance 
itself illegally with revenue taken from illegal logging, 
agriculture and mineral extraction, it remains unmotivated to join 
in the peace process. 
 
BUSINESS AND CIVIC ENGAGEMENT 
----------------------------- 
 
¶7. The Ambassador gave the keynote address at the Annual Induction 
of Officers of the Rotary Club of Davao.  She urged business and 
civic leaders to play a part in the peace process in Mindanao, 
pointing out that their success is evidence that peace results in 
increased levels of investment and community prosperity. Members 
from the 20 Rotary Clubs in Davao and its suburbs attended the 
event. 
 
¶8. The Commercial Counselor visited American businesses and the 
Chamber of Commerce to promote the American Showcase in Davao, a 
Commercial Service exhibit in October that will feature American 
products and agribusiness. 
 
¶9. On July 6, the Ambassador toured the Unifrutti Banana Plantation 
in Datu Paglas and was briefed by the Chairman of Unifrutti 
Philippines and the Managing Director for Philippine Operations of 
Chiquita-Unifrutti Asia. The Chairman explained that the Datu, the 
local tribal leader, plays a critical role in the plantation's 
success. In this area of Southern Mindanao, society remains feudal 
 
MANILA 00002422  002 OF 002 
 
 
and the local people consider the Datu to be the absolute authority 
in all matters.  In addition to serving as the mayor, the Datu is 
CEO and President of the Datu Paglas Corporation, the primary local 
investor in the plantation. The plantation's operating procedures 
mesh local culture with international business practices. Workers 
follow a 4 day per week rotating schedule and the workforce changes 
daily as the heads of each local family send different family 
members to work each day.  When the company realized that firing 
workers without obtaining the Datu's permission was culturally 
unacceptable, they gained local support by hiring his sister to work 
in Human Resources since that lended royal authority to personnel 
decisions of the company. 
 
¶10. The Chairman also provided insight into Asian market banana 
standards which divides bananas into different classes. For example, 
Japan will only purchase perfect Class A bananas as does Korea to a 
lesser extent. China on the other hand would accept all classes, but 
they are a large producer and do not need to import as much as the 
other countries. Finally, the Middle Eastern countries will accept 
any class of banana. 
 
DEVELOPMENT PROJECTS 
-------------------- 
 
¶11. Outside of Datu Paglas, the Ambassador traveled via tractor to 
formally turn-over the Bonawan Irrigation Structure to the Lower 
Bonawan-Maybula Irrigator's Association, whose 120 members will 
directly benefit from the project.  The $22,000 USAID project will 
help the Association maximize production on its 400 hectares of 
farmland.  A crowd of villagers turned out to see the town mayor and 
the Ambassador formally open a sluice that will more efficiently 
control the flow of water into the farmers' fields. 
 
¶12.  In Davao Ambassador witnessed the signing of grants between 
USAID and six business sector organizations to establish and 
strengthen family health programs in the workplace. USAID's PRISM 
Project announced the release of grants totaling USD 223,623 and 
total contributions from the business organizations reached USD 
90,106. Local dignitaries including the Representative from South 
Cotabato attended the event. 
 
MEDIA COVERAGE 
-------------- 
 
¶13. Media coverage of the trip was extensive and favorable. The 
Ambassador did interviews on both major Philippine television 
networks. She appeared live on a local news and variety program and 
taped a longer interview for an evening news program.  In both 
appearances, the Ambassador highlighted USG involvement in Mindanao. 
Additionally, she addressed the Davao media during a short interview 
at the grant signing ceremony. 
 
KENNEY