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OO RUEHCHI RUEHCN RUEHDT RUEHHM
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O 172330Z NOV 09
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5809
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS

UNCLAS SECTION 01 OF 03 MANILA 002400 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL OREP OVIP VA RP
SUBJECT:  SCENESETTER FOR THE VISIT OF CODEL FILNER 
 
¶1.  Chairman Filner, welcome again to the Philippines.  Your visit 
comes during an exciting time in the Philippines, as the official 
campaign for the May 2010 nationwide elections kicks off at the end 
of November.  The United States and the Philippines have a 
longstanding and deep relationship based on nearly 50 years of 
direct American administration, a Philippine government modeled on 
the U.S. government, broad economic ties, and an extensive 
interchange of people.  The more than four million 
Filipino-Americans now constitute the largest Asian ethnicity in the 
United States, while some 250,000 U.S. citizens reside in the 
Philippines.  The memory of our partnership in World War II still 
resonates here, and the recent passage of the Filipino Veterans 
Equity Compensation provision has served to further bolster the 
unique bond shared between U.S. and Philippine veterans.  U.S. 
interests in this major non-NATO ally center on strengthening 
democracy, fostering economic growth, fighting terrorism and other 
threats to security, and providing superb services to our American 
and Filipino publics.  The U.S. is the largest assistance grant 
donor to the Philippines, its largest trading partner, and the 
largest investor. 
 
¶2.  Your visit will include calls on senior Philippine officials, a 
visit with a joint U.S.-Philippine military task force in the 
southern Philippines, a tour of the VA Manila facilities, and 
several opportunities to visit historical sites in and around 
Manila.  Our entire team looks forward to making your visit 
productive and useful to you. 
 
BACKGROUND 
---------- 
 
¶3.  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 of over 7,000 
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 small Muslim minority (6%) based in 
Mindanao, where you will travel.  Over 40 percent of Filipinos earn 
less than $2 per day, with a much higher percentage of Muslims eking 
out a living below this threshold. 
 
VETERANS ISSUES 
--------------- 
 
¶4.  The U.S. Department of Veterans Affairs Manila Regional Office 
and Outpatient Clinic are the VA's only full-service facilities 
located in a foreign country.  VA provides monetary benefits to 
approximately 15,000 veterans and dependents residing in the 
Philippines, and provides health care to approximately 4,300 
veterans residing here.  The VA operation in Manila has a sizeable 
economic impact here, worth about $293.5 million in FY 2009.  VA 
also administers a medical equipment grant program to support the 
Philippine Government's Veterans Memorial Medical Center (VMMC).  To 
date over $5.5 million worth of medical equipment and facility 
upgrades have been donated to the VMMC.  Due to the low standard of 
living in the Philippines and the cultural preference to conduct 
business through middlemen, claims fraud remains a significant 
challenge.  While we have success in identifying fraud, obtaining 
prosecutions through the Philippine justice system is difficult. 
 
¶5.  The VA Manila office has sole jurisdiction over the 
administration of the Filipino Veterans Equity Compensation (FVEC) 
benefit, passed as part of the American Recovery and Reinvestment 
Act of 2009 (ARRA).  Since its passage, VA Manila has had great 
success in providing timely benefits to eligible veterans. To date, 
VA Manila has found over 10,000 Veterans or their widows eligible, 
and disbursed over $120 million of the allocated $198 million for 
this program.  Filipino veterans and their dependents in receipt of 
VA benefits enjoy a far greater standard of living here than their 
ineligible counterparts, many of whom receive benefits from the 
chronically in-debt Philippine Veterans Affairs Office at the rate 
of approximately $100 per month. 
 
SOCIAL SECURITY ADMINISTRATION 
------------------------------ 
 
¶6.  The Social Security Administration Division in Manila serves as 
the hub for Social Security work for all the Embassies and 
Consulates in the East Asia Pacific Region.  The division currently 
serves 41,000 beneficiaries and pays out over $25 million each 
month.  In the Philippines alone, there are almost 20,000 
beneficiaries. 
 
CONSULAR 
-------- 
 
¶7.  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 roughly 
120,000 Americans who visit the Philippines at any given time.  The 
Consular Section issues about 60,000 immigrant visas a year, 
including visas to large numbers of nurses, teachers, and physical 
 
MANILA 00002400  002 OF 003 
 
 
therapists.  The Consular Section sees almost 200,000 nonimmigrant 
visa applicants annually, including large numbers of merchant marine 
mariners and temporary seasonal workers. 
 
PHILIPPINE POLITICS 
------------------- 
 
¶8.  Philippine political life is free-wheeling, centered primarily 
on the personal charisma of individual political leaders, with most 
wealth and political power limited to a few influential families. 
President Gloria Macapagal Arroyo assumed the Presidency in 2001 
after a "people power" movement swept her predecessor out of office. 
 She was elected in her own right in controversial voting in May 
¶2004.  With less than a year left in office, President Arroyo 
continues to balance competing political interests amidst economic 
challenges.  President Arroyo has weathered numerous unsuccessful 
impeachment efforts and low-level military coup attempts.  With 
national elections scheduled for May 2010, nearly 20 cabinet members 
have announced their intention to seek elected office of some sort. 
Candidates for President, Congress, and Mayors positions must file 
their candidacies by November 30.  You will arrive amid intense 
jockeying for position as candidates start to file. 
 
PROMOTING HUMAN RIGHTS 
---------------------- 
 
¶9.  President Arroyo continues to express her 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, but the Philippine government acknowledges the need to do more 
to ensure that all such crimes 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 continues to conduct a comprehensive plan of public outreach 
activities, training, and institution building to make further 
progress in addressing the problem. 
 
ECONOMICS and TRADE 
------------------- 
 
¶10.  The U.S. remains the Philippines largest trading partner, with 
over $18 billion in two-way merchandise trade in 2008.  Major U.S. 
exports include electronics and agricultural products.  The U.S. is 
also the largest investor here, with over $6 billion in assets.  The 
large American Chamber of Commerce in Manila is proud of its history 
as the first American Chamber of Commerce abroad. 
 
¶11.  The Philippines has largely avoided the effects of the 
worldwide recession, and the economy is projected to grow between 
one and two percent in 2009.   Low levels of government 
infrastructure investment and public spending on health and 
education present serious challenges to poverty alleviation. 
However, a resilient service sector (particularly a booming business 
process outsourcing industry) and strong overseas workers' 
remittances (expected to increase to more than $17 billion in 2009, 
more than 10% of Philippine GNP) have helped the Philippines through 
this period of global economic slowdown.   The United States assists 
in economic development, anti-corruption, environmental protection, 
and poverty alleviation programs through our USAID programs, U.S. 
Department of Agriculture programs, and through the efforts of an 
active Peace Corps program. 
 
SECURITY and TERRORISM 
---------------------- 
 
¶12.  The U.S. has designated four extremist groups as Foreign 
Terrorist Organizations -- Jemaah Islamiyah, the Abu Sayyaf Group, 
the Rajah Solaiman movement and the New People's Army.  The first 
two groups currently pose the most direct threats to U.S. interests 
and are located in the poor, predominately Muslim south.  The New 
People's Army operates throughout the country.  We work closely on 
developing the capacity of the Armed Forces of the Philippines and 
the police to combat terrorists.  We provide training and equipment, 
engage in a robust program of joint military exercises, and are 
currently undertaking a joint, far-reaching program to reform the 
Armed Forces of the Philippines into a modern, effective force. 
The Philippines and the United States have scored important 
successes on the security cooperation and counterterrorism fronts. 
This alliance has resulted in the death or capture of a dozen key 
terrorist leaders and over 250 other terrorism suspects in the last 
three years.  Our Rewards for Justice Program provides incentives to 
identify and arrest terrorists.  About 60% of USAID's annual 
development assistance is channeled to conflict-affected areas of 
Mindanao to build infrastructure and carry out health, renewable 
energy, environment, education, and livelihood programs. These 
programs attack the conditions of poverty that provide a breeding 
ground 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. 
 
 
MANILA 00002400  003 OF 003 
 
 
PEACE PROCESS 
------------- 
 
¶13.  In recent weeks, the Philippine government and members of the 
separatist Moro Islamic Liberation Front (MILF) have established a 
new ceasefire and taken steps toward restarting formal peace talks, 
demonstrating that both sides share a mutually reinforcing 
commitment to peace.  This ceasefire ended a year of fighting that 
followed a Philippine Supreme Court Decision in August 2008 that a 
key peace deal with the MILF was unconstitutional.  The two sides 
have pledged to work toward a new framework for engagement and to 
aid the return of internally displaced persons affected by the 
conflict.  U.S. support through development assistance will be an 
important component of a successful peace process. 
 
KENNEY