PHILIPPINES TAKES REACTIVE STANCE TOWARD APEC

UNCLAS SECTION 01 OF 02 MANILA 005287

SIPDIS

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STATE FOR EAP/MTS and EAP/EP
TREASURY FOR OASIA
USDOC FOR 4430/ITA/MAC/ASIA & PAC/KOREA & SE ASIA/ASEAN
STATE PASS USDA/FAS FOR ROBERTS, SHEIKH, HENKE & YOUNG

E.O. 12958: N/A
TAGS: ETRD EPET EAGR PREL RP APEC WTO
SUBJECT: PHILIPPINES TAKES REACTIVE STANCE TOWARD APEC

Sensitive but Unclassified - Not for Internet - Protect
Accordingly


1. (SBU) Summary. The GRP views the APEC agenda
positively. The GRP's overarching approach to the
upcoming APEC meetings is to wait and see what other
members put on the table and then react according to RP
interests. With respect to WTO Doha Round issues, senior
officials express hope for balanced language that
reflects equally the interests of developing and
developed nations in improving market access for both non-
agricultural and agricultural goods. The RP strongly
supports APEC's avian influenza (AI) initiative and is
providing full political backing at the highest levels to
prepare for a potential AI outbreak in the Philippines.
The RP is also eager to work within APEC to address
energy concerns and is looking for regional approaches to
ensure greater energy security, stable prices and reduced
dependence on oil imports.

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GRP's Overall Strategy
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2. (SBU) Ramon Kabigting, Director of the Bureau of
International Trade Relations at the Department of Trade
and Industry and Alternate APEC Senior Officials Meeting
Leader, described the GRP's strategy at the APEC meetings
to Econoff November 8 as "reactive rather than
offensive." He said the government tends to wait and see
what other members put on the table and then decide
whether it is in the Philippines' general interest.
Kabigting, who will be attending the entire week of APEC
meetings, said the one issue the GRP expects to be more
proactive in is technical assistance and capacity
building. The GRP does not want to see funding used "to
teach each other how to negotiate at the WTO," but would
prefer APEC allow developing country members to access
the money to build up their infrastructure.

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WTO Doha Agenda
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3. (SBU) Kabigting said that he wants the Leaders'
statement (draft Busan Declaration) to be "balanced" by
urging developing nations to move forward on market
access but also urging developed nations to really open
up their markets, particularly in the agriculture sector.
He referred to the WTO statement as asking APEC for
"ambition with respect to non-agricultural market
access," which he believes has already been agreed upon
by member countries. He does not see much progress in
liberalizing agriculture markets, despite the U.S. offer,
though the Philippines would like to see a breakthrough
on market access. He said his guidance is to support the
Swiss Formula, even though he and his GRP colleagues know
that this will be difficult for some members. The
delegation's instructions are to try to help these
members look for solutions to overcome difficulties.

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Avian Influenza
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4. (U) The Philippines supports the APEC initiative on
preparing for and mitigating an Avian Influenza (AI)
pandemic and GRP is committed to take urgent measures to
improve response and preparedness capabilities. The
Philippines has a four-stage Avian Influenza Protection
Program covering the prevention and control of AI
outbreaks in poultry and humans. President Arroyo has
emphasized the GRP's commitment to AI preparedness. She
recently appointed Agriculture Secretary Domingo
Panganiban as the "anti-Avian Flu Czar" to lead inter-
agency efforts to prevent and control Highly Pathogenic
Avian influenza (HPAI) outbreaks, and Mass Media
Secretary Cerge Remonde to mount an all-out information

SIPDIS
drive to make the general public aware of the disease.


5. (U) Agriculture officials welcomed the regional
cooperation and the need to closely collaborate among
APEC members and international organizations to prepare
for the AI threat and take decisive preventive action,
including technical assistance. Kabigting also commented
that the world has to join hands and the GRP is "happy to
support" the APEC statement on that subject.

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Energy
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6. (U) The Philippines is eager to work within APEC to
find ways to mitigate the high price of oil, a problem
that the GRP has grappled with for many months to head
off transportation strikes and street demonstrations.
The Philippines imports 95% of its oil needs; the rise in
crude oil costs over the last year has added two
percentage points to inflation and reduced GDP growth.
The country also has some of the most expensive
electricity rates in Asia, a deterrent to investors, and
those rates will increase further as oil prices rise.
The GRP is looking for regional solutions to ensure
greater energy security, stable prices, and reduced
dependence on oil imports. The GRP declined a domestic
oil stockpile but may push for a regional one, and may
also pursue more domestic refining capacity.


7. (U) Although many of the items discussed at the APEC
Energy Ministers meeting in October resonate with the
Philippines, the Leaders' Statement encapsulates only a
few of these. The GRP is already cooperating on energy
investment, notably through the joint exploration of the
Spratly Islands with Vietnam and China. It would also
promote technology development for fuel additives such as
bioethanol. The GRP has encouraged energy conservation
and has diversified its energy use in power generation to
include a healthy mix of renewables, coal, natural gas,
and hydro. As Kabigting pointed out, the GRP supports
the APEC positions outlined in the Leaders' Statement to
address the high price of oil and reduce reliance on
fossil fuels in general.

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Comment
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8. (SBU) The GRP generally supports the APEC Leaders'
Statement and is not likely to present any surprises at
the upcoming meetings. The Philippines does not have any
specific issues to raise; the GRP is adopting a reactive
strategy and will basically wait to see what other
members bring to the discussion. The GRP is keen on
increased regional cooperation, particularly in energy
issues and avian influenza. Given the RP's reactive
stance, they may be flexible and willing to support some
of our interests.


9. (SBU) The GRP hopes to see progress on agricultural
market access and will push for language that equally
represents the needs of both developed and developing
nations. While DTI indicates that the GRP is supportive
of increased market access, they have not been supportive
of developed country action on domestic support being
tied to improved market access by developing countries.
As a net food importing country, the GRP only has the
market access pillar to negotiate on, and we anticipate
that their "wait and see attitude" at APEC will be
closely tied to the positions of some of the more
protectionist members of the G-20/G-33. End Comment.

JONES