VZCZCXRO1404
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHML #2626/01 3331010
ZNR UUUUU ZZH
O 281010Z NOV 08
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2550
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHHI/AMEMBASSY HANOI PRIORITY 6595
RUEHHM/AMCONSUL HO CHI MINH CITY PRIORITY 0083
RUEHHK/AMCONSUL HONG KONG PRIORITY 5002
RHHMUNA/CDRUSPACOM HONOLULU HI PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 MANILA 002626 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MTS 
 
E.O. 12958: N/A 
TAGS: OREP PGOV PINS PREL RP CH VM
SUBJECT: SCENESETTER FOR CODEL PRICE'S VISIT TO THE 
PHILIPPINES 
 
REF: STATE 121421 
 
MANILA 00002626  001.2 OF 003 
 
 
¶1. (SBU)  SUMMARY:  Embassy warmly welcomes CODEL Price 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 be 
briefed by the Mission Country Team and meet with Philippine 
officials including the head of the National Intelligence 
Coordination Agency (NICA) and the Speaker of the House of 
Representatives, and you will also visit the American 
Cemetery in Manila.  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.  Metropolitan 
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 Muslim minority (6%) in the southern 
island of Mindanao, the Sulu Archipelago, 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. 
 
-------------------- 
PHILIPPINES POLITICS 
-------------------- 
 
¶3. (SBU)  President Gloria Macapagal Arroyo is a forceful 
politician who has faced a series of challenges to her rule, 
including unsuccessful impeachment efforts and low-level 
military coup attempts.  She continues to attempt to initiate 
her political reform agenda while battling economic 
challenges.  The President's political position improved last 
year after elections gave her allies a large majority in the 
House of Representatives, decreasing any real impeachment 
threat.  Opponents continue to agitate in the Congress and 
filed yet another impeachment complaint against Arroyo on 
October 13, but this motion too faces almost certain defeat. 
Arroyo's term ends in 2010, and her Vice President and 
several senators are already lining up support to succeed her. 
 
 
------------------------ 
COUNTERTERRORISM EFFORTS 
------------------------ 
 
¶4. (SBU)  Three U.S.-designated terrorist organizations are 
active and dangerous in the Philippines, despite significant 
military and law enforcement successes against them over the 
past two years.  Parts of the Southern Philippines' 
Muslim-populated regions remain a sanctuary for terrorists 
who are responsible for bombings in the Philippines and 
Indonesia and kidnapping and killing of Americans and 
Filipinos.  Much of the work of this Mission's 30 USG 
agencies is focused on these parts of the Southern 
Philippines.  The major thrust of U.S. development assistance 
is targeted on conflict-affected areas of the Southern 
Philippines, through USAID, to help reduce support for 
terrorists.  A U.S. Joint Special Operations Task Force 
(JSOTF-P) of several hundred personnel provides direct 
support to the Philippine Armed Forces in key locations in 
the Muslim South, sharing intelligence, advice, and 
assistance.  President Arroyo is justly proud that the 
Philippine military has scored successes against several top 
terrorist leaders in its focused military operations. 
Equally impressive are the Philippine military's success in 
separating 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 throughout the Philippines. 
 
MANILA 00002626  002.2 OF 003 
 
 
 
----------------- 
HOMELAND SECURITY 
----------------- 
 
¶5. (SBU)  All USG agencies play important roles in Homeland 
Security at the U.S. Mission in the Philippines.  We are 
proud of extraordinarily close synergies among the many law 
enforcement, intelligence, political-military, and economic 
agencies represented at this Mission.  Key agency heads will 
meet with you after our overall Mission brief.  The three 
Department of Homeland Security agencies represented in 
Manila have prepared short presentations of their work in the 
Philippines. 
 
------------------------------------- 
PEACE PROCESS IN SOUTHERN PHILIPPINES 
------------------------------------- 
 
¶6. (SBU)  A key element of our counter-terrorism agenda, and 
our support for a stronger, more outward-looking Philippines, 
is supporting the peace process with Muslim insurgents in the 
Southern Philippines.  As peace talks aimed at greater local 
autonomy for Muslims progress, sanctuaries for terrorists 
diminish.  Those talks came to an impasse this summer when a 
key territorial agreement was ruled unconstitutional, and the 
government and Muslim insurgents are still working to revive 
the process.  Limited fighting in recent months has resulted 
in thousands of displaced persons living in temporary camps. 
While the U.S. has no official role in the peace talks, we 
continue to urge both sides to return to negotiations as soon 
as possible so displaced persons can return to their families 
and livelihoods. 
 
¶7. (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 the Mindanao region of the Southern 
Philippines.  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.  In response to the growing numbers of 
persons displaced by the government-rebel conflict in central 
Mindanao, the U.S. has announced an additional USD 2.5 
million in assistance for displaced persons in the past four 
months provided through NGOs, including the donation of 1,500 
tons of rice to the UN World Food Programme, the building of 
sanitation and water infrastructure to meet needs at crowded 
displaced persons camps, the provision of emergency health 
services, and the conducting of emergency health training for 
local and regional officials. 
 
 
--------------------------------------------- -- 
HUMAN RIGHTS: COMBATING EXTRA-JUDICIAL KILLINGS 
--------------------------------------------- -- 
 
¶8. (SBU)  President Arroyo has consistently expressed her 
commitment to resolving the complex and longstanding problem 
of extrajudicial killings (EJKs).  The number of 
extrajudicial killings decreased dramatically in 2007 and 
2008, but more still needs to be done, and the Embassy 
continues to press the issue at the highest levels of the 
Philippine government, while redirecting U.S. assistance to 
support government efforts.  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 frustration 
with a judicial system that is inefficient and strained 
beyond its capacity. 
 
¶9.  (SBU)  The government has responded with a police task 
force to investigate the killings, and the government also 
 
MANILA 00002626  003.2 OF 003 
 
 
rejuvenated the Presidential Committee on Human Rights, 
established an Armed Forces Human Rights office to 
investigate allegations, and allocated additional funding for 
the Commission on Human Rights.  The Embassy has supported 
all of these activities with training, assistance, and expert 
exchanges and is looking to broaden our support to 
confronting extrajudicial killings with both Philippine 
military and police personnel. 
 
------------------- 
ECONOMICS AND TRADE 
------------------- 
 
¶10. (SBU)  The U.S. is the Philippines' largest trading 
partner, with over $17 billion in two-way trade in 2007.  The 
U.S. is also the largest investor here, with $6.6 billion in 
equity.  After topping seven percent in 2007, Philippine 
Gross Domestic Product growth is expected to slow in 2008, to 
below five percent.  The Philippine banking system is 
relatively sound and not heavily exposed to risks from 
current global financial turmoil.  Nevertheless, Philippine 
companies already are announcing layoffs and economic pain 
from recession is mounting.  If the global downturn is 
prolonged, the impact on poverty in the Philippines, where 
about half the population live on $2/day or less, will be 
very important and could have serious implications for 
security policy. 
JONES