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05MANILA5329 2005-11-14 10:36:00 CONFIDENTIAL Embassy Manila
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					  C O N F I D E N T I A L SECTION 01 OF 02 MANILA 005329 



E.O. 12958: DECL: 11/14/2015

Classified By: Charge d'Affaires, a.i., Paul W. Jones for
reasons 1.4 (b) and (d).

1. (C) Summary: In a November 11 meeting with EAP DAS John
and Charge, Department of National Defense (DND)
Undersecretary Carolina reviewed the Philippine Defense
Reform (PDR) process. Carolina asserted that PDR was
"embedded" in the system now and did not rely on current
Defense Secretary Avelino Cruz's personal involvement to push
it through. DND Undersecretary Rodel Cruz reviewed GRP views
on possible new legislation to make the existing Visiting
Forces Agreement (VFA) more applicable to ongoing
anti-terrorism cooperation. U/S Cruz and U/S Carolina said
Defense Secretary Cruz looked forward to his early December
visit to Washington. DAS John underscored USG opposition to
any form of emergency rule or martial law (septel). End


Review of PDR's status


2. (C) EAP DAS Eric John and Charge met DND Undersecretary
for PDR Ernesto Carolina, DND Undersecretary for Legal and
Priority Affairs Rodel Cruz, and Philippine Ambassador to the
U.S. Alberto del Rosario on November 11. U/S Carolina said
the PDR program was proceeding well, having grown out of the
2003 Joint Defense Assessment endorsed by President Bush and
Arroyo during the former's October 2003 state visit to the
Philippines. He noted that the DND was implementing the
program in cooperation with the USG. (Note: The GRP
committed USD 17.45 million to PDR in 2004, transferring this
amount to a Foreign Military Sales, "FMS," account. Current
USG counterpart funding is about USD 7 million. End Note.)
Three key areas of PDR's continued focus include: 1)
improving management of the armed forces; 2) underscoring GRP
civilian control of the armed forces; and 3) building
capacity for the war against terrorism. U/S Carolina
commented that it had become easier for the DND to provide
the Philippine Congress with a multi-year perspective of
"resources linked to strategy" due to the implementation of
modern management methods via PDR.

3. (C) U/S Carolina said the key practical step now was to
upgrade capabilities for battalions, given the importance of
the battalion as a fighting unit. The DND was working with
the Armed Forces of the Philippines (AFP) completely to
outfit and provide training for 14 battalions a year. U/S
Cruz remarked that it would be useful if FMS could be used to
purchase the equipment needed for this effort, which he hoped
would prove faster than a commercial competitive bidding
process. To assist the battalion upgrade process, U/S Cruz
added that DND was working hard to develop its national
training center at Fort Magsaysay and to build several
regional training centers.


PDR Process seen as "Embedded"


4. (C) DAS John asked whether the PDR process now had its
own momentum or whether it still relied on the efforts of DND
Secretary Avelino Cruz. U/S Carolina responded that the DND

has a "firm PDR management plan" in place and is neither ad
hoc nor reliant on any personalities. Overall, the PDR
effort was at this point "embedded" and firmly part of the
AFP's future roadmap. U/S Carolina admitted that DefSec Cruz
had done an excellent job of "marketing" PDR. Down the line,
when there was new leadership at the DND, similar efforts to
"push" PDR would also be key to its success, he added.


Examining "a New Legal Footing"


5. (C) U/S Cruz reviewed GRP views on possible new
legislation on joint exercises that could supplement the
existing VFA. U/S Cruz noted that the Mutual Defense Treaty
(MDT) of 1951 and the VFA had been developed in a different
international context. Nowadays, he commented, the MDT and
VFA did not adequately deal with needs in the area of
anti-terrorism cooperation, which had become vital in the
post-9/11 world. He explained that therefore DND is looking
to place such cooperation on "a new legal footing." DND
officials had not yet decided whether new legislation was
needed to supplement the VFA, suggesting that perhaps only an
addendum to the VFA regarding counter-terrorism cooperation
might be necessary. He predicted that GRP proposals on the
way forward could be ready by the end of the year.

6. (C) Charge said that it is important not to let
consideration of a firmer legal footing impinge on our vital
counterterrorism cooperation. U/S Cruz admitted that the GRP
was under pressure to take steps on this matter from some
elements in Congress. Senate Foreign Relations Committee
Chairperson Miriam Santiago and Senator Juan Ponce Enrile,
notably, had asserted that current anti-terrorism exercises
had no legal basis, as they did not fit into the "baskets" of
what was envisaged by the MDT and the VFA. However, Senator
Richard Gordon and Senate Defense Committee Chairman Rodolfo
Biazon were very helpful. U/S Cruz added that the GRP felt
some urgency on the matter -- "legally speaking, we cannot
afford even one thing to go wrong or the entire edifice of
the MDT and VFA could fall down." U/S Cruz specifically
noted that the GRP's "Kapit Bisig" proposal for upgraded
GRP-USG counterterrorism cooperation could benefit from a
more solid legal framework under which to operate.

7. (C) U/S Cruz and Carolina added that Defense Secretary
Cruz looked forward to his early December visit to

8. (U) DAS John did not have an opportunity to review this

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