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C O N F I D E N T I A L SECTION 01 OF 03 MANILA 000329 
 
SIPDIS 
 
STATE FOR EAP/MTS 
 
E.O. 12958: DECL: 02/13/2019 
TAGS: MARR MPOS PINS PREL RP
SUBJECT: SCENESETTER FOR ADMIRAL BIRD'S VISIT TO THE 
PHILIPPINES 
 
MANILA 00000329  001.2 OF 003 
 
 
Classified By: Acting Deputy Chief of Mission Larry L. Memmott; 
for reasons 1.4 (b) and (d) 
 
¶1.  (C) SUMMARY: Admiral Bird, welcome back to the 
Philippines!  Our recent meetings with senior Philippine 
officials have underscored that our bilateral security 
relationship is robust and that the Philippines is a valued 
strategic partner, but we are keenly aware of the sensitivity 
surrounding U.S. military presence in the Philippines.  On 
February 11, the Philippine Supreme Court ruled that the 
Visiting Forces Agreement was constitutional, but also 
decided that U.S. Marine Lance Corporal Daniel Smith should 
be in Philippine custody, pending discussions between our two 
governments.  We publicly have reaffirmed the professionalism 
of our military personnel, and during your visit, the 
heightened political and media environment surrounding the 
court decision will require close coordination on public 
events, community relations activities, and liberty. 
Successes continue on key security cooperation and 
counterterrorism issues along with the government's pledge to 
re-start the stalled peace process talks with the Moro 
Islamic Liberation Front soon.  With less than 16 months left 
in her term, President Arroyo is battling a potentially 
worsening economy and competing political interests. 
President Arroyo continues to express her commitment to human 
rights and assures us the government will continue its 
efforts to reduce the number of extrajudicial killings in 
¶2009.  During your visit you will be briefed by the Mission 
Country Team and will meet with Philippine Armed Forces Chief 
of Staff General Alexander Yano, Philippine Navy commander 
Vice Admiral Ferdinand Golez, and Undersecretary for Legal 
Affairs Alberto Valenzuela, and participate in outreach 
activities for the USS Blue Ridge visit.  END SUMMARY. 
 
-------------------------------------- 
SUPREME COURT RULES VFA CONSTITUTIONAL 
-------------------------------------- 
 
¶2. (C) The Philippine Supreme Court ruled February 11 that 
the Visiting Forces Agreement (VFA), which governs the 
presence of U.S. military personnel in the Philippines, is 
constitutional.  However, it also ruled that U.S. Marine 
Lance Corporal Daniel J. Smith, who has been in custody on 
Embassy grounds since his December 2006 conviction for rape, 
should be transferred to Philippine custody.  The Mission is 
intensively engaging senior levels of the Philippine 
government on the court decision and LCPL Smith will remain 
in USG custody until a mutually acceptable resolution is 
reached.  We publicly have emphasized that the U.S. military 
holds itself to the highest standards of conduct, but the 
sensitive media and political atmosphere generated by the 
Supreme Court's decision will require that we closely 
cooperate on all activities during the USS Blue Ridge visit, 
including public appearances and liberty.  Press guidance is 
attached in paragraphs 12-13. 
 
----------------------------------- 
SUCCESSFUL COUNTERTERRORISM EFFORTS 
----------------------------------- 
 
¶3. (C) The United States and the Philippines have scored 
important successes on the security cooperation and 
counterterrorism fronts over the last several years, and the 
Philippines continues to be a valued strategic partner. 
Secretary of National Defense Gilberto Teodoro recently 
emphasized that the Philippine government's success against 
key high value individuals of the Abu Sayyaf Group (ASG) and 
Jemaah Islamiyah (JI) terrorist organizations were achieved 
despite persistent shortfalls in logistical assets, and he 
values the contributions of U.S. military personnel to the 
improved combat capability of Philippine forces.  While the 
overall security situation in the southern Philippines has 
improved significantly over the past two years as a result 
U.S. military assistance, the brazen January kidnappings on 
Jolo island of three members of the International Committee 
of the Red Cross, who remain in terrorist captivity, 
highlights the continuing challenges that face the Philippine 
military and police in securing these volatile areas. 
 
¶4. (C) As a result of continued joint training with their 
U.S. counterparts, the Philippine military has disrupted 
terrorist networks in Mindanao and destroyed numerous known 
terrorist camps in the Sulu Archipelago.  Since November 
2008, combined military and police efforts in Mindanao, 
supported by U.S. personnel, led to the capture of senior JI 
facilitators Hajiruddin Dansalan in November 2008, and Omar 
 
MANILA 00000329  002.2 OF 003 
 
 
Venancio and Makasid Dilna in January 2009.  Separately, on 
December 7, 2008, the Philippine military conducted nearly 
simultaneous offensives against high-value ASG members on 
Jolo island and an ASG group involved in numerous kidnappings 
on Basilan island. 
 
--------------------------------------------- -- 
STRONG BILATERAL DEFENSE RELATIONSHIP CONTINUES 
--------------------------------------------- -- 
 
¶5. (C) With a new administration in Washington and 
presidential elections for the Philippines set for May 2010, 
senior Philippine defense officials believe now is the time 
to showcase the depth of the U.S.- Philippine relationship in 
a variety of areas, including counterterrorism operations, 
disaster relief, and multilateral engagement.  As such, these 
officials have emphasized that continued U.S. military 
assistance is essential and that expanded programs could 
provide greater improvements in areas ranging from regional 
security to human rights. 
 
¶6. (C) Recently, Secretary Teodoro also stressed that the 
U.S.-Philippine Mutual Defense Treaty, which has been in 
place since 1953, could not be underestimated for its 
importance in reinforcing the history shared between our two 
countries and for providing a mechanism for future 
engagement.  Teodoro has championed the successes of 
Philippine Defense Reform (PDR) with sustained U.S. 
assistance, and said that with the PDR set to conclude with 
the end of his tenure in 2010, he wants to complete two 
additional components in the next 15 months:  a study of 
Philippine counterinsurgency doctrine based on current 
practices; and a review of information and psychological 
operations to determine the most effective way to build 
support for government efforts.  Philippine defense officials 
generally believe that the next phase of the U.S.-Philippine 
military relationship should go beyond combat training and 
focus on broader strategic objectives. 
 
¶7. (C) From increased ship visits to robust bilateral 
exercises to a national focus on civil-military and 
humanitarian activities, the Philippine government welcomes 
U.S. military engagement and is working to streamline 
administrative processes so bilateral activities proceed 
smoothly, particularly with regard to ship and aircraft 
clearances.  Along with over 800 aircraft clearances, the 
Philippine government approved 130 ship visits in 2008 -- up 
from 81 in 2007.  The overwhelming positive impact of these 
ship visits on the local communities, not only in economic 
terms, but more importantly in the associated community 
relations activities conducted while in port, garner enormous 
goodwill among the local populace. 
 
--------------------------------------------- ------ 
GOVERNMENT PLEDGES TO RESTART STALLED PEACE PROCESS 
--------------------------------------------- ------ 
 
¶8. (C) Although peace talks with separatist Moro Islamic 
Liberation Front (MILF) insurgents have remained stalled 
since  fighting broke out in August 2008, prospects point 
towards a possible resumption of negotiations this spring -- 
a promise that the government has pledged to keep. 
Groundwork already proceeding includes a reconstituted 
government peace panel, a newly-appointed chief negotiator, 
back-channel communications with Muslim rebels, and overtures 
to Malaysia and other nations to play an active role as 
mediators in facilitating renewed talks.  A firmly 
re-established cease-fire and renewed peace talks would 
create a more positive atmosphere for talks and allow tens of 
thousands of displaced people to return home.  Earlier this 
year, President Arroyo publicly stated that 2009 would be a 
"comeback year for peace" and that she would emphasize to all 
stakeholders that a robust peace process between the 
Philippine government and the MILF would encourage stability 
in the region and enhance economic development. 
 
------------------- 
PHILIPPINE POLITICS 
------------------- 
 
¶9. (C) With 16 months left in office, President Gloria 
Macapagal Arroyo continues to balance competing political 
interests amidst economic challenges.  A forceful politician 
who has faced a series of challenges to her rule, including 
unsuccessful impeachment efforts and low-level military coup 
attempts, President Arroyo's administration has been plagued 
 
MANILA 00000329  003.2 OF 003 
 
 
by allegations of corruption.  As her term ends in 2010, her 
Vice President and several senators have already announced 
their intent to run for the presidency.  While her 
administration has publicly pledged to reinvigorate the 
stalled Mindanao peace process, it is also widely believed 
that she will soon begin to actively lend support to her 
choice to succeed her as president. 
 
--------------------------------- 
PHILIPPINES ECONOMIC GROWTH SLOWS 
--------------------------------- 
 
¶10. (U) In 2007, the Philippine economy grew by seven 
percent, but growth slowed to five percent in 2008.  However, 
in recent months, many Philippine businesses as well as 
several U.S. companies announced plant closures and large 
scale layoffs, signaling that the economic pain from the 
world-wide economic slowdown is widening.  Should the global 
economic downturn be prolonged, the impact on poverty in the 
Philippines, where almost half the population lives on less 
than USD two dollars per day, could have a visible impact on 
domestic politics.  On the positive side, the Philippine 
banking system is relatively sound and not heavily exposed to 
risks from current global financial turmoil.  The U.S. 
remains the Philippines' largest trading partner, with over 
$17 billion in two-way trade during 2007 and the largest 
investor, with $6.6 billion in equity. 
 
---------------------- 
PROMOTING HUMAN RIGHTS 
---------------------- 
 
¶11. (C) President Arroyo continues to express her unwavering 
commitment to making greater progress on the long-standing 
problem of extrajudicial killings, and has taken concrete 
steps in this direction.  Partly due to increased attention 
by the Philippine government, the number of extrajudicial 
killings decreased dramatically through 2007 and 2008.  While 
many execution-style slayings among politicians and others 
are likely a result of local disputes and long-standing feuds 
among rival clans, the government acknowledges the need to do 
more to ensure that all such crimes -- whether or not linked 
to security forces -- are fully investigated, and that those 
responsible are brought to justice.  The Embassy continues to 
press the issue at the highest levels of the Philippine 
government, and has implemented a comprehensive plan of 
public outreach activities, training, and 
institution-building to make further progress in addressing 
the problem. 
 
----------------------------- 
PRESS GUIDANCE FOR SMITH CASE 
----------------------------- 
 
¶12.  (U)  In response to numerous media queries, the Embassy 
issued a brief statement February 11 as follows: 
 
Philippine Supreme Court Decision on Visiting Forces Agreement 
 
-- The U.S. Embassy has taken note of the Supreme Court 
decision regarding the Visiting Forces Agreement (VFA).  As 
it concerns important legal issues, we have referred it to 
United States legal experts in Washington. 
 
¶13.  (U) The following if-asked guidance was also prepared: 
 
-- The Visiting Forces Agreement (VFA) has provided the sole 
framework for U.S.-Philippine cooperation on legal cases 
involving visiting U.S. military personnel. 
 
If asked about whereabouts of Daniel Smith: 
 
-- Daniel Smith remains in confinement on the grounds of the 
main U.S. Embassy compound. 
 
KENNEY