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UNCLAS SECTION 01 OF 07 MANILA 003595 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR INL, EAP/MTS, INR/TNC 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: SNAR PGOV RP
SUBJECT: PHILIPPINES 2007-2008 INTERNATIONAL NARCOTICS 
CONTROL STRATEGY REPORT (INCSR) PART I, DRUGS AND CHEMICAL 
CONTROL 
 
REF: STATE 136782 
 
¶1.  The following text is keyed to questions posed in the 
2007-2008 International Narcotics Control Strategy Report, 
Part I, Drugs and Chemical Control (ref). 
 
¶I.  SUMMARY 
 
¶2.  The Government of the Philippines (GRP) attributes a 
reported decline in the number of users of illicit drugs to 
continued joint efforts of the Philippine law enforcement 
authorities in disrupting major drug trafficking 
organizations and in dismantling clandestine drug 
laboratories and warehouses.  The Dangerous Drugs Board (DDB) 
reports that in 2007, there was a significant increase in 
seizures of clandestine labs, while the number of drug 
abusers reportedly declined.  The Philippine government 
continues to build the capacity of the Philippine Drug 
Enforcement Agency (PDEA), which was established by the GRP 
in 2002; the PDEA Academy graduated its first 55 agents in 
February 2007.  Based on 2007 seizures, the Philippines 
continues to be a producer of methamphetamine.  There is some 
evidence that terrorist organizations may use drug 
trafficking to fund their activities. 
 
¶3.  The Philippines is a party to the 1988 UN Drug 
Convention. 
 
II.  STATUS OF COUNTRY 
 
¶4.  According to the DDB, within the Office of the President, 
there has been a continuous decline in the number of drug 
users and a downward trend in the number of drug-related 
arrests in the Philippines.  The most recent DDB survey 
(2007) reported that there are approximately 3.4 million 
regular and occasional drug users, compared with 6.7 million 
in 2004, the last year the survey was conducted. 
Methamphetamine, locally known as "shabu," is the primary 
drug of choice in the Philippines.  However, the significant 
number of seizures of clandestine laboratories has resulted 
in the continuous decline of supply of methamphetamine.  The 
DDB reports that the current price of methamphetamine has 
escalated from 2,000 pesos per gram in 2006 to 5,000 pesos in 
2007, although according to the PDEA, the price varies from 
3,000 pesos on the streets of Manila to 5,000 pesos in 
outlying provinces.  In quantities of 10 grams or more, the 
price can be as low as 2,500 pesos per gram. 
 
¶5.  Methamphetamine is clandestinely manufactured in the 
Philippines.  Precursor chemicals are smuggled into the 
Philippines, or illegally diverted after legal importation, 
from the People's Republic of China (PRC), including Hong 
Kong.  Ephedrine has also been smuggled from India, although 
there have been no such seizures since 2005.  In 2007, there 
were 220 local drug trafficking groups identified, compared 
with 105 in 2006.  According to the DDB, there were eight 
known transnational drug organizations operating in the 
country in 2007, compared with seven in 2006.  Each group 
includes at least five major foreign drug lords from the PRC 
and Taiwan.  Muslim separatist groups participate in the 
distribution of methamphetamine in the Philippines, 
particularly in the southern section of the country.  The Abu 
Sayyaf Group (ASG) along with elements of the Moro Islamic 
Liberation Front (MILF) are also directly involved in 
smuggling, as well as protection of methamphetamine 
production and its transportation to other parts of the 
country and across southeast Asia.  The Philippines is a 
source of methamphetamine exported to Australia, Canada, 
Japan, South Korea, and the U.S. (including Guam and Saipan). 
 
¶6.  Dealers sell methamphetamine hydrochloride in crystal 
form for smoking (shabu).  No production or distribution of 
methamphetamine in tablet form ("yaba") has been reported in 
the Philippines.  Producers typically make methamphetamine in 
clandestine labs through a hydrogenation process that uses 
palladium and hydrogen gas to refine chlor-ephedrine mixture 
into crystal form.  Another production method involves the 
use of red phosphorous. 
 
¶7.  The Philippines produces, consumes, and exports 
 
MANILA 00003595  002 OF 007 
 
 
marijuana.  Cultivation of marijuana is in mountainous, often 
government-owned, areas inaccessible to vehicles.  Marijuana 
has gained popularity because of the price increase of 
methamphetamine.  Although Philippine law enforcement 
officials have conducted numerous eradication operations, the 
lack of fuel for military and police helicopters makes it 
difficult for the Philippine government to keep up with rapid 
marijuana re-cultivation.  The New People's Army (NPA) 
insurgent group control and protect most marijuana plantation 
sites.  Most of the marijuana produced in the Philippines is 
for local consumption, with the remainder smuggled to Korea, 
Japan, Malaysia, and Taiwan. 
 
¶8.  Methylenedioxy-methamphetamine (MDMA), commonly known as 
ecstasy, is gaining popularity among young expatriates and 
affluent members of the Philippine society.  Although there 
was no significant increase in seizures during 2007, there is 
a reported MDMA smuggling organization operating in Mindanao, 
in the southern region of the country.  PDEA reports an 
increase in the number of dealers operating in the Manila 
metropolitan area. 
 
¶9.  According to the DDB, while there are no reports of 
ketamine abuse in the country, intelligence indicates the 
presence of transnational drug groups that utilize the 
country as a venue for the production of ketamine powder for 
export to other countries. 
 
III.  COUNTRY ACTIONS AGAINST DRUGS IN 2007 
 
¶A.  POLICY INITIATIVES 
 
¶10.  The administration of President Gloria Macapagal Arroyo 
has pledged to continue to concentrate on the full and 
sustained implementation of counter-narcotics legislation and 
the PDEA as the lead counter-narcotics agency. 
 
¶11.  In 2002, President Arroyo created by executive order the 
Philippine National Police (PNP) Anti-Illegal Drugs Special 
Operations Task Force (AIDSOTF) to maintain law enforcement 
pressure on narcotics trafficking while PDEA became fully 
functional by 2007.  In 2006, PDEA began training its first 
academy class, which provided approximately 55 new newly 
trained PDEA agents in February 2007.  In mid-2007, the 
Secretary of the Department of Interior and Local Government 
 
SIPDIS 
ordered the then-Chief of PNP to recall over 600 officers who 
had been seconded to PDEA.  Only a small number of PNP 
officers were allowed to remain in PDEA temporarily, 
primarily in the headquarters unit and special teams, 
effectively eliminating PDEA's investigative capability in 
many provinces.  For example, there is now only one PDEA 
agent in Region I (Ilocos Norte, Ilocos Sur, La Union 
provinces), the primary area for export of marijuana. 
 
¶12.  The GRP has developed and is implementing a 
counternarcotics master plan known as the National Anti-Drug 
Strategy (NADS).  The NADS is executed by the National 
Anti-Drug Program of Action (NADPA) and contains provisions 
for counternarcotics law enforcement, drug treatment and 
prevention, and internal cooperation in counternarcotics, all 
of which are objectives of the 1988 UN Drug Convention.  In 
2007, cities, towns, and barangays (neighborhoods) continued 
to utilize anti-drug law enforcement councils, as mandated by 
NADPA, to conduct community awareness programs, such as 
rallies, seminars, and youth activities. 
 
¶13.  The GRP has institutionalized a drug testing program 
(urinalysis) for law enforcement personnel, students, 
drivers, firearms owners, and workers.  Additionally, the GRP 
has promulgated a national drug-free workplace program which 
provides for random drug-testing of employees, and assistance 
for employees who admit to having a drug problem. 
 
¶14.  In July 2005, the DEA Manila Country Office and Joint 
Inter-Agency Task Force-West (JIATF-W) began to develop a 
network of drug information fusion centers in the 
Philippines.  The primary facility, the Maritime Drug 
Enforcement Coordination Center (MDECC) is located at PDEA 
Headquarters in Quezon City.  There are three satellite 
centers, called Maritime Information Coordination Centers 
 
MANILA 00003595  003 OF 007 
 
 
(MICCs), located at the headquarters of the Naval Forces 
Western Mindanao, Zamboanga del Sur (southwestern Mindanao), 
Coast Guard Station General Santos City (south-central 
Mindanao), and at Poro Point, San Fernando, La Union 
(northwestern Luzon).  These centers gather information about 
maritime drug trafficking and other forms of smuggling, and 
provide actionable target information that law enforcement 
agencies can use to investigate and prosecute drug 
trafficking organizations.  An executive order requiring the 
Armed Forces of the Philippines (AFP), Philippine National 
Police (PNP), National Intelligence Coordinating Agency 
(NICA), and Philippine Coast Guard (PCG) to comply with an 
earlier Memorandum of Agreement and partner with PDEA in the 
Maritime Drug Enforcement Coordination Center (MDECC) project 
was submitted to the Office of the President in February 
2006, but has yet to be signed.  The PNP, PDEA, PCG, and NICA 
have nonetheless voluntarily assigned personnel to the MDECC. 
 
¶B.  LAW ENFORCEMENT EFFORTS 
 
¶15.  Counter-narcotics law enforcement remains a high 
priority of the GRP.  Lack of resources continues to hinder 
operations, but law enforcement efforts are relatively 
effective, given low funding levels.  PDEA officials believe 
ILEA and JIATF-West training for law enforcement and military 
personnel have helped make interdiction operations more 
efficient and effective.  GRP law enforcement agencies 
continued to target major traffickers and clandestine drug 
labs in 2007.  Significant successes included the seizures of 
a number of clandestine laboratories and warehouses.   In 
September 2007, the PNP recovered 246 kilograms of high-grade 
"shabu" from an overturned vehicle on the South Luzon 
Expressway, south of Manila; PNP estimated the potential 
street price of the methamphetamine to be  P1.23 billion (USD 
27.33 million). 
 
¶16.  Current Philippine laws regarding electronic 
surveillance and bank secrecy prevent Philippine enforcement 
agencies from using electronic surveillance techniques, and 
restrict access to bank information of suspected drug 
traffickers.  The 1965 Anti-Wiretapping Act prohibits the use 
of wiretapping, as well as consensual monitoring of 
conversations and interrogations, as evidence in court. 
Additionally, there are no provisions to seal court records 
to protect confidential sources and methods.  Hence, most 
drug arrests result from information from disgruntled drug 
trafficking insiders who voluntarily give leads to the 
Philippine authorities. 
 
¶17.  Along with a nearly 80% loss of its investigative 
manpower, the lack of a functioning laboratory remains a 
significant operational weakness for PDEA, as in previous 
years.  Dismissals and resignations have also decreased the 
number of experienced staff at the laboratory.  In addition, 
the lab lacks basic equipment.  The Japanese International 
Cooperation Agency donated a sophisticated gas chromatograph 
mass spectrometer scanner to PDEA in 2006, but the capacity 
of the PDEA lab has not been fully developed; many exhibits 
are analyzed at the PNP crime laboratories, particularly in 
the provinces.  In addition, the lack of a functioning lab 
means there is no adequate storage facility for evidence; 
currently, PDEA stores seized drugs and chemicals (some 
highly toxic) in shipping containers in the headquarters 
parking lot.  PDEA is interviewing candidates for the vacant 
Laboratory Service Director position.  Selection of an 
experienced, fully qualified forensic chemist to take over 
operations and develop standard operating procedures would be 
an important step in creating a credible, functional lab. 
 
¶18.  Pervasive problems in law enforcement and criminal 
justice system such as corruption, low morale, inadequate 
resources and salaries, and lack of cooperation between 
police and prosecutors also hamper drug prosecutions.  The 
slow process of prosecuting cases not only demoralizes law 
enforcement personnel but also permits drug dealers to 
continue their drug business while awaiting court dates.  GRP 
statistics in 2007 showed only a 35 percent conviction rate 
in drug cases, and the leading cause for dismissal of cases 
is the non-appearance of prosecution witnesses, including 
police officers.  By the time a case gets to trial, witnesses 
 
MANILA 00003595  004 OF 007 
 
 
have often disappeared, or been persuaded through extortion 
or bribery to change their testimony.  The Comprehensive 
Dangerous Drug Act prohibits plea-bargaining in exchange for 
testimony once a suspect has been charged; this concept 
conflicts with standard practices in the U.S. and other 
Western countries.  There is no incentive for a defendant to 
plead guilty and offer testimony against superiors in the 
drug trafficking organization, so investigations in the 
Philippines generally end with the first arrests.  Often, 
runners and street dealers are the only ones charged, and 
they have no motive to give up their sources and patrons. 
This is a significant weakness in the Comprehensive Dangerous 
Drug Act. 
 
¶19.  The terrorist Abu Sayyaf Group (ASG) and New People's 
Army (NPA) are directly linked to drug trafficking activity. 
PNP officials believe elements of the ASG are engaged in 
providing security for marijuana cultivation, protection for 
drug trafficking organization (DTO) operations, and local 
drug distribution operations, particularly in Jolo and 
Tawi-Tawi. Philippine police and military officials report 
that the ASG continues to provide protection for major drug 
trafficking groups operating in the Sulu Archipelago as well 
as local drug trafficking activity, in exchange for cash 
payments that help fund their own operations; many ASG 
members are drug users themselves.  Likewise, NPA cadres 
throughout the country earn money to feed their members by 
providing protection to drug traffickers and marijuana 
cultivators. 
 
¶20.  The Philippine authorities dismantled five clandestine 
methamphetamine mega-laboratories and several warehouses in 
¶2007.  GRP law enforcement officials cite three factors 
behind the existence of domestic labs: 
 
a.  The simplicity of the process in which ephedrine can be 
converted into methamphetamine on a near one-to-one 
conversion ratio; 
 
b.  The crackdown on drug production facilities in other 
methamphetamine-producing countries in the region; and 
 
c.  The relative ease, increased profit, and lesser danger of 
importing precursor chemicals for methamphetamine production 
(ephedrine/pseudo-ephedrine), compared to importing the 
finished product. 
 
¶21.  Additionally, corruption and inefficiency in the 
judicial process encourage foreign traffickers to establish 
their clandestine laboratories in the Philippines vice other 
countries in Asia.  They are less likely to be caught, 
particularly since their communications cannot be 
intercepted, and if they are arrested, they are unlikely to 
be convicted. 
 
¶22.  PDEA reports that in 2007, authorities seized 328.82 
kilograms of methamphetamine, which they valued at USD 38.28 
million (at USD 100 per gram), 31.72 kilograms of Ketamine, 
which they valued at USD 3.17 million (at USD 100 per gram), 
793 kilograms of processed marijuana leaves and buds, which 
they valued at USD 396,500 (at USD 0.50 per gram), and 2.536 
million plants (including seedlings), which they valued at 
USD 11.66 million (at USD 4.60 each).  Philippine authorities 
claimed to have seized total narcotics worth approximately 
USD 53,486,500, arrested 5,489 people for drug related 
offenses, and filed 3,359 criminal cases for drug crimes in 
¶2007.  By comparison, 8,616 individuals were arrested in 
¶2006.  Out of 13,667 drug cases filed from 2003 to 2007, only 
4,790 led to convictions (most of which were cases of simple 
possession).  The rest were either acquitted or dismissed. 
PRC- and Taiwan-based traffickers remain the most influential 
foreign groups operating in the Philippines. 
 
¶C.  CORRUPTION 
 
¶23.  Corruption among the police, judiciary, and elected 
officials continues to be a significant impediment to 
Philippine law enforcement efforts.  The GRP has criminalized 
public corruption in narcotic law enforcement through the 
Comprehensive Dangerous Drug Act (CDDA), which clearly 
 
MANILA 00003595  005 OF 007 
 
 
prohibits GRP officials from laundering proceeds of illegal 
drug actions.  Four PDEA employees were arrested in 2006 for 
the theft of seven kilograms of seized methamphetamine from 
PDEA headquarters.  These personnel have been detained and 
charges are still pending against them.  Ten PDEA and PNP 
AIDSOTF officers were arrested in October 2006 for conducting 
illegal raids, and for kidnapping the subjects of those 
raids.  Both the PNP and PDEA have divisions for internal 
policing, for corruption, and other violations of policy and 
law.  There are strong indications that drug money is funding 
illicit aspects of provincial and local political campaigns, 
such as vote buying, bribery of election officials, ballot 
theft, and voter intimidation. 
 
¶24.  As a matter of government policy, the Philippines does 
not encourage or facilitate illicit production or 
distribution of narcotic or psychotropic drug or other 
controlled substances, or the laundering of proceeds from 
illegal drug transactions. 
 
¶25.  No known senior official of the GRP engages in, 
encourages, or facilitates the illicit production or 
distribution of narcotic or psychotropic drugs or other 
controlled substances, or the laundering of proceeds from 
illegal drug transactions.  However, a city mayor from Quezon 
province was convicted in 2007 on charges from a 2001 drug 
trafficking investigation, and is now serving a term of life 
imprisonment.  Numerous other active and former politicians 
and officials, some of them senior, have been implicated in 
drug trafficking and money laundering, but have yet to be 
charged. 
 
¶D.  AGREEMENTS AND TREATIES 
 
¶26.  The Philippines is a party to the 1988 UN Drug 
Convention, as well as to the 1971 UN Convention on 
Psychotropic Substances, the 1961 UN Single Convention on 
Narcotic Drugs, and the 1972 Protocol Amending the Single 
Convention.  The Philippines is a party to the UN Convention 
against Transnational Organized Crime and its protocols 
against trafficking in persons and smuggling of migrants. 
The U.S. and the GRP continue to cooperate in law enforcement 
matters through a bilateral extradition treaty and Mutual 
Legal Assistance Treaty.  The Philippines has signed the UN 
Convention Against Corruption. 
 
¶E.  CULTIVATION/PRODUCTION 
 
¶27.  DDB reports that there are at least 60 marijuana 
cultivation sites spread throughout the mountainous areas of 
nine regions of the Philippines, compared with PDEA's 
estimate of 120 sites in 2006.  Using manual techniques to 
eradicate marijuana, various government entities claim to 
have successfully uprooted and destroyed 2.536 million plants 
and seedlings in 2007, compared with 2.713 million plants and 
seedlings in 2006. 
 
¶F.  DRUG FLOW/TRANSIT 
 
¶28.  The Philippines is a narcotics source and transshipment 
country.  Illegal drugs and precursor chemicals enter and 
leave the country through seaports, economic zones, and 
airports.  The Philippines has 7,000 islands and over 36,200 
kilometers of coastline.  Vast stretches of the Philippine 
coast are virtually unpatrolled and sparsely inhabited. 
Traffickers often use shipping containers, fishing boats, and 
cargo vessels (which off-load to smaller craft) to transport 
multi-hundred kilogram quantities of methamphetamine and 
precursor chemicals.  AFP and law enforcement marine 
interdiction efforts are made ineffective by a lack of 
intelligence sharing and basic resources such as fuel for 
patrol vessels.  Commercial air carriers and express mail 
services remain the primary means of shipment to Guam, 
Hawaii, and to the mainland U.S., with a typical shipment 
size of one to four kilograms.  One unique case involved 
female airline passengers carrying methamphetamine to Guam, 
Hawaii, and California on their person. There has been no 
notable increase or decrease in transshipment activities in 
¶2007. 
 
 
MANILA 00003595  006 OF 007 
 
 
¶G.  DOMESTIC PROGRAMS AND DEMAND REDUCTION 
 
¶29.  The Comprehensive Dangerous Drug Act of 2002 includes 
provisions that mandate drug abuse education in schools, the 
establishment of provincial drug education centers, 
development of drug-free workplace programs, the 
implementation of random drug testing for secondary and 
tertiary students; mandatory drug testing for military and 
law enforcement personnel, and driver's license and firearm 
license applicants; and other demand-reduction classes. 
Abusers who voluntarily enroll in treatment and 
rehabilitation centers are exempt from prosecution for 
illegal drug use.  Statistics from rehabilitation centers 
will be submitted later. 
 
IV.  U.S. POLICY INITIATIVES AND PROGRAMS. 
 
¶A.  U.S. POLICY INITIATIVES 
 
¶30.  The USG's main counternarcotics assistance goals in the 
Philippines are to: 
 
a. Work with local counterparts to provide an effective 
response to counter the still-growing clandestine production 
of methamphetamine; 
 
b. Cooperate with local authorities to prevent the 
Philippines from becoming a source country for drug 
trafficking organizations targeting the United States market; 
 
c. Promote the development of PDEA as the focus for effective 
counternarcotics enforcement in the Philippines; and 
 
d. Provide ILEA, JIATF-West, and other drug-related training 
for law enforcement and military personnel. 
 
¶B.  BILATERAL COOPERATION 
 
¶31.  The U.S. assists the Philippine counternarcotics efforts 
with training, intelligence gathering and fusion, and 
infrastructure development. 
 
¶C.  ROAD AHEAD: 
 
¶32.  The USG plans to continue work with the GRP to promote 
law-enforcement institution building and encourage 
anti-corruption mechanisms via JIATF-West programs, as well 
as ongoing programs funded by the Department of State (INL 
and S/CT, and USAID).  Strengthening the bilateral 
counter-narcotics relationship serves the national interests 
of both the U.S. and the Philippines. 
 
¶V.  STATISTICAL TABLES. 
 
¶33.  The Philippines is not a "Major List" country. 
 
VI.  CHEMICAL CONTROL. 
 
¶34.  There is no domestic production of ephedrine or 
pseudoephedrine in the Philippines.  Pseudoephedrine is 
imported into the country for production of Robitussin DM-P 
FS Syrup and Robitussin PS Syrup by pharmaceutical companies. 
 There is no known case of diversion of ephedrine or 
pseudoephedrine since 2004, when the Philippine Bureau of 
Customs seized a transshipment of 1,500 kg pseudoephedrine 
from China to Australia by a shell company using a forged 
importation permit.  To ensure ephedrine and pseudoephedrine 
are not diverted for illicit use, the GRP law requires all 
importers of these two chemicals to register with PDEA so 
secure importer's licenses.  In addition, for every 
importation of these chemicals, an import permit must be 
secured with PDEA prior to importation.  Upon the arrival of 
the chemicals, the Bureau of Customs notifies PDEA for 
inspection of imported chemicals, and a second inspection is 
also done by PDEA at the storage facility of the chemicals. 
No movement of these chemicals is allowed without a permit 
from PDEA.  Import permits and local permits concerning 
transactions involving ephedrine/pseudoephedrine are obtained 
via PDEA, and a copy of the import permit is provided to the 
appropriate authority of the exporting country. 
 
MANILA 00003595  007 OF 007 
 
 
KENNEY