VZCZCXYZ0000
OO RUEHWEB

DE RUEHML #0049/01 0070559
ZNR UUUUU ZZH
O 070559Z JAN 08
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9326
INFO RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEHBK/AMEMBASSY BANGKOK 2544
RUEHPF/AMEMBASSY PHNOM PENH 0223
RUEHKA/AMEMBASSY DHAKA 2512
RUEHHK/AMCONSUL HONG KONG 4794

UNCLAS MANILA 000049 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP AND H -- PLEASE PASS TO STAFFDEL GROVE 
 
E.O. 12958: N/A 
TAGS: OREP PREL EAID RP
SUBJECT: SCENESETTER FOR STAFFDEL GROVE 
 
¶1. (SBU) Summary: Embassy Manila warmly welcomes Staffdel Grove to 
the Philippines!  The relationship and spirit of partnership between 
the United States and the Philippines are strong.  U.S. interests in 
this major non-NATO ally center on strengthening democracy, 
fostering economic growth, fighting terrorism, and providing superb 
services to our American and Filipino publics.  The U.S. is the 
Philippines' largest trading partner, the largest investor, and the 
largest donor of grant foreign assistance.  During your visit, you 
will meet with key government officials to discuss the peace process 
in Mindanao, the complex problem of extra-judicial killings, and the 
government's ongoing counterterrorism efforts.  You will also travel 
to the southern island of Mindanao to see first hand our joint 
counterterrorism and development activities.  Our entire team looks 
forward to making your visit productive and useful.  End Summary. 
 
---------- 
BACKGROUND 
---------- 
 
¶2. (U) The Philippines, with almost 90 million people, has one of 
the fastest-growing populations in Asia.  Metro Manila, home to at 
least 12 million people, is the largest city in a country made up of 
over 7,000 mainly mountainous islands.  Literacy (94%) remains high, 
although the standard of public education and other government 
services is weak.  Filipinos are mainly Roman Catholic (83%) or 
otherwise Christian (10%) with a small Muslim minority (6%) in the 
southern island of Mindanao and in Manila.  Approximately 38 percent 
of Filipinos earn less than $2 per day, with a much higher 
percentage of Muslims in Mindanao eking out a living below this 
threshold. 
 
------------------- 
PHILIPPINE POLITICS 
------------------- 
 
¶3. (SBU) Philippine politics is free-wheeling, focused primarily on 
the charisma of individual political leaders, and still largely 
oligarchic, with most wealth and political power concentrated among 
influential families.  President Gloria Macapagal Arroyo assumed the 
Presidency in 2001 after a "people power" movement swept out her 
predecessor, whom she recently pardoned after he was convicted of 
corruption.  She is a strong leader who has faced a series of 
challenges to her rule, including unsuccessful impeachment efforts 
and low-level military coup attempts.  The President's political 
position improved after May 2007 elections gave her allies a large 
majority in the House of Representatives, decreasing any impeachment 
threat.  With three years left in her term, the President appears 
intent on establishing her legacy, with a focus on the economy and 
jobs, infrastructure, and seeking stability and peace on Mindanao. 
 
 
------------------- 
ECONOMICS AND TRADE 
------------------- 
 
¶4. (U) The U.S. is the Philippines' largest trading partner, with 
over $17.3 billion in two-way merchandise trade.  Major U.S. exports 
include electronics and agriculture.  The U.S. is also the largest 
investor here, with $6.6 billion in equity.  In 2007 Texas 
Instruments announced further investment of $1 billion in microchip 
production, while AES, a U.S. power company, acquired a coal-fired 
power plant for $930 million.  The Philippine economy grew nearly 
seven percent in 2007, the strongest expansion in three decades. 
Unemployment and inflation are down, and government revenues are up, 
even in the face of rising fuel prices, continued corruption 
allegations, terrorist bombings, and political tumult.  President 
Arroyo has an impressive reform agenda -- privatize the electric 
sector, build infrastructure, increase education funding, reduce 
business red tape -- but still faces significant hurdles, 
particularly improving the investment climate. 
 
------------------------ 
COUNTERTERRORISM EFFORTS 
------------------------ 
 
¶5. (SBU) Three U.S.-designated terrorist organizations are active 
and dangerous in the Philippines, despite significant military 
success against them over the past two years.  Parts of Muslim 
Mindanao remain a sanctuary for terrorists who are responsible for 
bombings in the Philippines and Indonesia and kidnapping and killing 
of Americans and Filipinos.  A Joint Special Operations Task Force 
(JSOTF-P) of several hundred personnel provides direct support to 
the Philippine Armed Forces in key locations in Muslim Mindanao, 
sharing intelligence, advice, and assistance.  The major thrust of 
U.S. development assistance is focused in conflict-affected areas of 
Mindanao through USAID to help reduce support for terrorists. 
President Arroyo is justly proud that the Philippine military has 
scored successes against several top terrorist leaders in its 
focused military operations.  Successful military operations have 
led to the deaths of Khadaffy Janjalani and Abu Solaiman, the top 
two leaders of the Abu Sayyaf Group, and kept Jemaah Islamiyah 
terrorists on the run.  Equally impressive are the military's 
successful efforts to help separate local populations from 
insurgents through extensive civil-military and humanitarian 
activities.  Separately, the New People's Army of the Communist 
Party continues to extort, bomb and attack remote police and 
military outposts. 
 
---------------------------- 
COMMITMENT TO DEFENSE REFORM 
---------------------------- 
 
¶6.  (SBU) The Philippines' Defense Reform Program gradually is 
transforming the Philippine military into a more transparent, 
accountable, and effective institution.  The effort was strengthened 
when Secretary of National Defense Gilberto Teodoro recently assumed 
personal responsibility for the reform program.  This U.S.-supported 
effort aims at a complete restructuring of the military 
establishment ranging from personnel management and logistics to 
acquisition and training.  With the advice of the Joint U.S. 
Military Assistance Group and a 13-member team of U.S. experts, the 
AFP and Department of National Defense have already registered 
significant gains.  U.S. Special Force troops are helping jumpstart 
the newly begun Battalion Retraining Program, which will retrain all 
72 Army and 12 Marine battalions. 
 
------------------------- 
PEACE PROCESS IN MINDANAO 
------------------------- 
 
¶7. (SBU) Negotiations with the Muslim insurgency, under Malaysian 
auspices, are making headway toward establishing a larger Muslim 
political entity within the Philippines that would determine its own 
governing structure.  While significant progress has been made on 
the territorial borders of the new political entity, the challenge 
facing the Government's Chief Negotiator Rudy Garcia and the 
Presidential Advisor on the Peace Process Jess Dureza will be to 
bring together Mindanao's diverse Muslim, Christian and native 
communities into a larger peace agreement.  We are pressing for 
concrete progress on this complex agenda this year.  Successful 
peace in Mindanao would make the Philippines a stronger, more 
outward-looking partner, while also denying terrorists ungoverned 
spaces. 
 
¶8. (U) Development assistance from the U.S., complemented by 
increasing support from the World Bank, Japan, Australia, and others 
has established growing zones of peace and private sector-led growth 
in Mindanao.  About 60% of USAID's annual development assistance is 
channeled to conflict-affected areas of Mindanao to promote economic 
opportunities, build infrastructure, and carry out health, renewable 
energy, environment, education, local governance, and livelihood 
programs.  These programs attack the conditions of poverty that 
provide breeding grounds for terrorists.  USAID coordinates its 
activities with the U.S. military's Civil Affairs programs.  Our 
exchange programs for students and community leaders offer a chance 
to interact with responsible and moderate Muslims. 
 
--------------------------------------------- -- 
HUMAN RIGHTS: COMBATING EXTRA-JUDICIAL KILLINGS 
--------------------------------------------- -- 
 
¶9. (SBU) President Arroyo has consistently expressed her commitment 
to resolving the complex problem of extra-judicial killings and has 
taken several steps in this direction.  With increased domestic and 
international pressure, the number of extra-judicial killings 
decreased dramatically in 2007, but more still needs to be done. 
While many of these deaths and disappearances are more likely 
attributable to local disputes than to military or police action, it 
is clear that the government needs to do more to ensure that these 
crimes are fully investigated and that responsible parties -- 
whether or not they are connected to military or police -- are 
brought to justice.  The problem is closely related to a judicial 
system which is strained beyond its capacity and inefficient.  The 
government has responded with a police task force ("Task Force 
Usig") to investigate the killings and file charges against the 
culprits.  The Task Force is working closely with the newly created 
Police Human Rights Office, charged with investigating cases of 
suspected police involvement in the killings and providing human 
rights training to the police force.  The government also 
rejuvenated the Presidential Committee on Human Rights, established 
a new Armed Forces Human Rights office to investigate allegations, 
and allocated additional funding for the Commission on Human 
Rights. 
 
-------------------------- 
STILL AVIAN INFLUENZA FREE 
-------------------------- 
 
¶10. (U) Although the avian influenza virus has not been detected in 
the Philippines, the threat is considered high given the close 
proximity to several affected countries, including Indonesia and 
Malaysia.  The Philippines banned importation of all live poultry 
and poultry products from avian influenza-affected countries in 
¶2005.  The U.S. government actively supports the Philippine 
government's efforts to mitigate the threat in the country.  The 
Mission has focused these public health efforts in Mindanao, due to 
its proximity to Indonesia and Malaysia.  The Mission's Inter-Agency 
Task Force on Avian Influenza has a broad-based membership including 
USAID, Foreign Agriculture Service, State Department, U.S. Military, 
Veterans Administration, and Peace Corps. 
 
---------------- 
CONSULAR AFFAIRS 
---------------- 
 
¶11. (U) The Consular Section provides services (reports of birth, 
passports, notarial, and emergency support) to the approximately 
130,000 Americans living in the Philippines as well as the 
additional roughly 120,000 visiting the Philippines at any given 
time.  State Department officers issue about 60,000 immigrant visas 
a year, including visas to large numbers of nurses, teachers, and 
physical therapists.  We interview almost 200,000 nonimmigrant visa 
applicants annually, including large numbers of merchant mariners 
and temporary seasonal workers. 
 
------------------------- 
THEMES AND TALKING POINTS 
------------------------- 
 
¶12. (SBU) You may wish to draw on the following themes in your 
meetings: 
 
-- The Philippines is a vital partner in the fight against terrorism 
to secure peace and prosperity for our two nations.  Our delegation 
looks forward to learning more about U.S.-Philippine cooperation 
during this visit. 
 
-- U.S. military forces are here at the invitation of the government 
of the Philippines to provide assistance and share information with 
the Philippine military.  Together, we provide health care, build 
schools, and provide clean water to communities in need. 
 
-- Philippine Defense Reform is transforming the Armed Forces of the 
Philippines into a more modern, capable force.  We are proud to be 
partners in this program. 
 
-- We take the issue of extra-judicial killings seriously.  Suspects 
need to be apprehended and tried.  We are encouraged by steps the 
Philippine government has taken to eliminate this problem. 
 
-- U.S. development assistance and business partnerships are helping 
achieve higher economic growth and spread this growth, especially to 
the poor and disadvantaged. 
 
-- (If asked about the case of a U.S. Marine convicted of rape of a 
Filipina at Subic in November 2005) I cannot comment on an ongoing 
legal case in the Philippine justice system.  Both our governments 
remain committed to the pursuit of justice as well as adherence to 
the terms of the Visiting Forces Agreement. 
 
Visit Embassy Manila's Classified SIPRNET website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
 
You can also access this site through the State Department's 
Classified SIPRNET website: 
http:// www.state.sgov.gov/ 
 
KENNEY