VZCZCXRO0851
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHML #0601/01 0702322
ZNR UUUUU ZZH
O 102322Z MAR 08
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0048
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS

UNCLAS SECTION 01 OF 02 MANILA 000601 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
DEPT FOR M/DHGR FROM AMBASSADOR 
 
E.O. 12958: N/A 
TAGS: PREL EAID RP AMGT
SUBJECT: SCENESETTER FOR VISIT OF DIRECTOR GENERAL 
 
 
¶1. (SBU) We warmly welcome your visit to the Philippines. The 
relationship between our two nations is deep and complex, and our 
partnership addressing a host of common issues has many faces.  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 Philippine Department of Foreign 
Affairs officials, observe American business in the Philippines, and 
meet with Embassy staff and family members.  Our entire team looks 
forward to making your visit productive and interesting. 
 
---------- 
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 has declined in recent decades.  Filipinos are mainly Roman 
Catholic (83%) or otherwise Christian (10%) with a Muslim minority 
(6%) largely concentrated on the southern island of Mindanao.  The 
glittering high rises and high-end shops of the Makati, Ortigas and 
Ft. Bonifacio districts belie the fact that approximately 38 percent 
of Filipinos earn less than $2 per day. 
 
------------------- 
PHILIPPINE POLITICS 
------------------- 
 
¶3. (SBU) Philippine politics remains unpredictable, with President 
Gloria Arroyo's administration facing renewed charges of corruption 
from a loose coalition of opportunist political opponents (and 
others with personal aspirations for high office), portions of the 
business community and civil society, and left-wing activist groups. 
 Still, she retains a firm grip on the politically key House of 
Representatives, effectively checkmating any impeachment attempt, 
and can still count on the support of a large majority of provincial 
governors and local mayors.  Her relationship with top security 
officials also remains strong, as evidenced by their recent 
reminders to military and police personnel to stay out of political 
debates and stay focused on their security roles.  In general, the 
broad public may be suffering from scandal fatigue since repeated 
calls for the President's resignation have not mobilized sustained 
mass support for regime change in the vein of the "people power" 
movements of the past. 
 
------------------- 
ECONOMICS AND TRADE 
------------------- 
 
¶4. (SBU) The Philippine economy continues to perform well with 
growth of over 7 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 maintains an impressive reform agenda - to 
privatize the electric sector, build infrastructure, increase 
education funding, and reduce business red tape - but still faces 
significant hurdles, particularly in improving the investment 
climate, largely due to the powerful influence of an entrenched 
elite of traditional business families that see little benefit for 
themselves in opening the nation's economy.  There is also 
considerable concern over the impact of a slowdown in U.S. economic 
growth, as the U.S. remains the Philippines' largest trading partner 
with over $17.3 billion in two-way merchandise trade and as their 
largest investor with $6.6 billion in equity. 
 
----------------- 
COUNTERTERRORISM 
----------------- 
 
¶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, Filipinos and others.  A Joint U.S. Special Operations 
Task Force (JSOTF-P) of several hundred personnel provides direct 
support to the Philippine Armed Forces in Mindanao, sharing 
intelligence, advice, and assistance while carefully avoiding any 
involvement in combat operations, which is forbidden by Philippine 
law. The major thrust of U.S. development assistance is focused in 
conflict-affected areas of Mindanao through USAID to help reduce 
support for terrorists.  The Philippine military has undertaken 
successful programs to help separate local populations from 
insurgents through extensive civil-military and humanitarian 
activities.  Separately, the New People's Army of the Communist 
 
MANILA 00000601  002 OF 002 
 
 
Party continues to extort, bomb, and attack remote police and 
military outposts. 
 
----------------------------- 
MISSION MANAGEMENT HIGHLIGHTS 
----------------------------- 
 
¶6. (U) The Mission enjoys the active inter-agency participation of 
27 USG agencies comprised of 315 U.S. direct hire positions (75 of 
whom, or more than 20%, are first or second tour officers), 1085 
locally engaged staff, and 42 eligible family member employees. 
Completing our Mission are 450 family members.  Three families are 
currently residing in Manila while their State spouses have 
volunteered for long term temporary duties in Iraq or Pakistan this 
year. 
 
¶7. (U) Transition plans are being formulated to address extremely 
high levels of projected local staff turnover due to retirement and 
immigration over the next five years. This attrition also provides 
an opportunity to recruit tech-savvy staff who will help us find new 
solutions to management challenges. It will also dovetail with 
efforts to execute a long range plan for multi-agency administrative 
support service consolidation that is designed to create a common 
service platform.  Completion of OBO construction of three new 
office annex buildings by 2012 will also consolidate virtually all 
USG staff on two compounds. 
 
¶8.  (U) Last year, the Mission inaugurated a Professional 
Development Center (PDC) to use limited training funds to bring more 
training opportunities to Manila from FSI, the regional training 
center in Bangkok, and through a Post train the trainer program. 
The initiative has been well received, with over 260 employees 
benefiting from training in Manila in 2007 and the focused course 
load is on track to expand to 35-40 courses and 300 more personnel 
in 2008.  Manila's demand for long-term training is also evident as 
this Mission is also the largest overseas user of FSI distance 
learning courses. 
 
------------ 
YOUR PROGRAM 
------------ 
 
¶9.  (U) Post has a variety of activities and meetings planned for 
you beginning Monday, March 24.  The Ambassador will lead a Mission 
Briefing at the Chancery, followed by a discussion with senior 
Mission officials on effective leadership in times of crisis, with 
particular focus on handling staff morale and resources.  Post 
invites you to deliver remarks at a town hall meeting of Mission 
personnel.  The Acting Consul General will then give you a tour of 
the Consular Section, to be followed by an informal lunch with 
Foreign Service Specialists, who will be interested in issues 
relating to specialists and regional activities.  Subsequently, the 
Embassy's local employee association will offer a presentation on 
its activities, followed by a briefing from the Human Resources 
Office on Manila's brain-drain, succession planning and EFM/MOH 
employment program. Beyond the Mission compound, the Philippine 
Foreign Service Institute will welcome you to learn about its 
process of selecting and training Filipino Foreign Service Officers. 
 Our regional USG publishing center, Global Publishing Solutions, 
will provide a tour of its facilities and an explanation of its 
operations. The Ambassador will host a reception for you with 
Embassy spouses.  We have also organized a visit to one of Dell 
International's newest and largest call centers, for a glimpse of 
the inner workings of a dynamic American company conducting 
innovative human capital-intensive operations here. 
 
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