SCENESETTER FOR G/TIP DIRECTOR AMBASSADOR JOHN

C O N F I D E N T I A L SECTION 01 OF 04 MANILA 005606

SIPDIS

HONG KONG FOR G/TIP AMBASSADOR MILLER
STATE FOR EAP/MTS, G/TIP, DRL/CRA, EAP/PD
DRL/PHD FOR ANN MARIE JACKSON

E.O. 12958: DECL: 12/01/2015
TAGS: PREL EAID ELAB KCRM PHUM KPAO RP HK
SUBJECT: SCENESETTER FOR G/TIP DIRECTOR AMBASSADOR JOHN
MILLER'S VISIT

REF: A. MANILA 5326

B. MANILA 5166

C. MANILA 5097

Classified By: political officer Tim Cipullo for
reasons 1.4(b) and (d).


1. (SBU) Summary. Our strategic relations with the
Philippines are important to both countries, and we generally
work together constructively on global issues, including
Trafficking in Persons (TIP). The GRP publicly condemns
trafficking and has enacted strong laws to combat it.
However, the ability of the GRP to arrest, try, and convict
suspects of almost any crime is less than optimal. In
addition, GRP efforts are hampered by poverty, corruption,
unemployment and socio-economic factors that encourage
migration, weak rule-of-law, and sex tourism. Mission is
actively engaged in several programs aimed at increasing the
capacity of Philippine police, prosecutors, and social
workers involved with TIP cases, and to address some of the
systemic weaknesses in the Philippine judicial system. You
will see the major players during your visit: President
Gloria Macapagal Arroyo, Justice Secretary Raul Gonzalez,
Acting Secretary of the Department of Social Welfare and
Development Luwalhati Pablo, International Justice Mission
Director Patricia Sison Arroyo, and Visayan Forum Foundation
President Cecile Oebanda. You should use your meetings to
push for greater GRP efforts to convict traffickers under the
2003 Anti-TIP law. In the midst of ongoing political
turbulence, we encourage you also to underscore the
importance of rule of law and the constitutional framework
for resolving political differences, as well as our firm
opposition to emergency rule, which would undermine the fight
against TIP, as well as against terrorism and damage ongoing
defense reform and prospects for more robust economic
development. End Summary.

DOMESTIC DISTRACTIONS
--------------


2. (C) President Arroyo continues to fight for her political
viability, as she struggles against allegations that she
engaged in cheating to win the 2004 presidential election as
well as other allegations that were at the basis of a failed
impeachment effort earlier this year. These domestic woes
are distracting her and senior officials from the GRP's
substantive agenda, including TIP. The Congress and nation
have embarked on a course of constitutional change, which
potentially could transform the Philippines into a
parliamentary system, with or without a President, within one
to two years, and possibly create a federal state. Much
legislative and political capital and attention will be
focused on this process over the months ahead. The Communist
insurgency, unsettled political situation, or the fight
against terrorism could prompt an unwise declaration of a
state of emergency. We believe emergency rule would prove
disastrous to the GRP's progress on substantive issues of
mutual concern -- including TIP -- as well as to investor
confidence and to the Philippines' international image.

STRATEGIC CONTEXT
--------------


3. (C) Despite never-ending domestic political dramas and
tensions, the Philippines remains an important strategic
partner, treaty ally, and a vibrant democracy, as GRP
officials will welcome hearing from you. The US is virtually
the Philippines' indisputable number one partner, no matter
how much the GRP and President Arroyo herself claim to seek a
balanced relationship among the US, PRC, and Japan. Our
views and opinions matter considerably here, on TIP and other
key issues domestically and regionally. Our security
alliance remains robust and of importance to US troops and
USG objectives, as well as to those of the GRP, in combating
terrorism, enhancing regional stability, and fighting
transnational crime, including TIP.

A REAL TERRORISM THREAT
--------------


4. (C) The terrorism threat here is real. Porous borders,
weak institutions, fragile government, a long-running Muslim
insurgency, and ever-present corruption make the Philippines
highly vulnerable. Jemaah Islamiyah (JI) and Abu Sayyaf
Group (ASG) terrorists continue to elude government forces in
Mindanao, while the Communist Party of the Philippines/New
People's Army (CPP/NPA) maintains a country-wide presence
bent on destabilization. The Rajah Solaiman Movement (RSM)
represents a significant worry because of its ties to foreign
financing and the ability of its members -- Christian
converts to Islam -- to "blend in." The Philippines has a
recent history of terrorist attacks on its own territory. The
February 28, 2004, bombing of Superferry 14, which killed
over one hundred Filipinos, was the second worst terrorist
attack in Asia after the October 2002 Bali bombings, while
the February 14, 2005 "Valentine's Day" bombs in Manila and
Mindanao killed and injured many shoppers and commuters.


5. (C) The GRP has, however, racked up some recent
successes. On October 26, Philippine military and police
arrested Ahmad Santos, the fugitive leader of RSM, and eight
other suspected terrorists at a safe house in Zamboanga. On
the same day, Philippine Air Force intelligence operatives
seized Sattar Yusop, an ASG member under US indictment for
his role in the Dos Palmas kidnappings. On October 28, a
Philippine court convicted and sentenced to death three JI,
RSM, and ASG terrorists for their roles in the 2005
"Valentine's Day" bombing in Manila (ref C).

ECONOMY NOT STRONG, BUT STEADY
--------------


6. (SBU) Our counterterrorism engagement in the Philippines
ranges from humanitarian relief and development to the
military and public diplomacy. USAID's Livelihood
Enhancement and Peace (LEAP) program has reintegrated over
28,000 former Moro National Liberation Front (MNLF)
combatants into productive society as successful farmers, and
stands poised -- should the GRP sign a peace agreement with
the Moro Islamic Liberation Front (MILF),as both sides
increasingly appear to expect in the next year -- to provide
similar assistance to the MILF. USAID's broad spectrum of
development programs (in infrastructure, education,
governance, health, economic growth, environment, and energy)
in conflict-affected areas of Mindanao have made a positive
impact in communities vulnerable to exploitation by
terrorists, as well as contributed to greater judicial
efficiency, electoral reform, promotion of rule of law, and
more thorough attention to TIP efforts nationwide.


7. (U) Although the Philippine economy is growing by nearly
5% each year, it is constrained by massive debts to both
domestic and foreign bond-holders. Combined liabilities of
the government and state-owned enterprises equal 90% of GDP,
and the debt-service payments on these loans consume
two-thirds of the annual budget. The just implemented
expansion of the Value Added Tax to include fuel and power
will help the GRP further to reduce its fiscal deficit and
increase spending on social services, such as health and
education, and on the expansion and repair of roads and
railway lines. There appears to be a grudging acceptance of
the need for new taxes to restore fiscal imbalances.


8. (U) A stronger, more stable economy could boost foreign
direct investment to the Philippines, which flows in at a
paltry level compared to other countries in East and
Southeast Asia. To boost development and prosperity, the USG
encourages economic reform initiatives toward greater
privatization, trade liberalization, and open markets, and we
have worked closely with GRP officials on the Philippines'
Millennium Challenge Corporation concept paper focusing
heavily on anti-corruption and revenue enhancement efforts.
US firms account for the largest stock of FDI in the country,
and the US is still one of the country's largest trading
partner, counting trade in goods and services. Corruption
remains a significant impediment to investors, along with the
high cost of electricity, poor infrastructure, bureaucratic
delays, weak enforcement of intellectual property rights, and
an unpredictable legal system.

TRAFFICKING IN PERSONS (TIP)
--------------


9. (U) The Philippines is an origin point for
internationally trafficked persons and suffers from an
internal TIP problem. Most victims are young women. The GRP
is publicly steadfast against TIP, and in 2003 Congress
passed Republic Act 9208, a comprehensive anti-trafficking
law. The State Department designated the Philippines as a
Tier 2 Watch List country in 2004 and re-designated it on the
Tier 2 Watch List in 2005. Mission continues to underscore
the seriousness of the TIP problem with GRP officials
including the possibility of a downgrade to Tier 3 next year
if stronger actions, notably convictions of the guilty and
more prosecutions, are not taken. The Charge has discussed
the issue with the President twice during the last month and
she is looking forward to your visit.


10. (SBU) The GRP's ability to address the problem is
limited by poverty, unemployment and socio-economic factors
that encourage migration, a weak rule-of-law environment, and
sex tourism. The GRP coordinates anti-TIP efforts through
the Inter-Agency Council Against Trafficking (IACAT),which
is chaired by the Secretary of Justice. GRP enforcement of
its anti-trafficking law has increased as more law
enforcement officers, prosecutors, and judges receive
training, including some funded by USAID. Dozens of TIP
cases under the 2003 law are pending, and courts handled down
the first convictions under this law in November 2005, with
more expected in the coming months.


11. (U) The Philippines' vibrant NGO community is mobilized
against TIP. The US-based International Justice Mission
focuses on rescuing victims and prosecuting traffickers. A
unique feature of Philippine law allows NGOs to act as
prosecutors. The Visayan Forum Foundation operates four
shelters for TIP victims, and has received one grant from DRL
in 2005 and one from USAID in 2003. Other NGOs acting
against TIP include Development Action for Women Network, the
Coalition Against Trafficking ) Asia Pacific, and the Asia
Foundation; both have also received USG grants.


12. (U) Mission is actively engaged in several programs
aimed at increasing the capacity of Philippine police,
prosecutors, and social workers involved with TIP cases.
Trainers at USG-funded roadshows have educated officials
throughout the country about the new anti-trafficking law and
how to pursue trafficking cases more effectively. Many of
the cases currently pending under R.A. 9208 were filed by
recipients of such training. Recently, Mission sponsored a
workshop on TIP for members of the Philippine National
Police's (PNP) Women and Children's Concern Division (WCCD).
Trainers highlighted the seriousness of TIP as a global
issue, as well as application of key Philippine TIP
legislation. Local media was extensive and largely
favorable, despite a few skewed editorial comments linking
TIP with an ongoing alleged rape case involving U.S. military
personnel. The seminar represented a "quick win" for the PNP
in current reform efforts, in which Mission is playing a
crucial, ongoing role. At the same time, a broader USG/GRP
initiative seeks to address key flaws in the Philippine
justice system that hamper TIP-related prosecutions,
particularly a lack of cooperation between police and
prosecutors.

PRESS THEMES
--------------


13. (SBU) The Philippines is an exuberant media environment.
In both your private and public remarks, we encourage you to
highlight:

-- TIP: The USG takes the issue of trafficking extremely
seriously. To this end, we are engaged on several fronts to
increase the capacity of the GRP to fight trafficking. We
want to support Philippine efforts to combat the serious
trafficking problem that exists here. We know the
Philippines can do better in this endeavor, and hope to see
the guilty be brought to justice soon. Failure to make
progress could lead to a downgrade to Tier III status in 2006;

-- Partnership: The Philippines is a valued partner in the
Global War on Terror, as well as a Major Non-NATO Ally. We
look forward to opportunities to advance our substantive
bilateral agenda including counterterrorism, TIP,
anti-corruption, and other issues of common concern;

-- Rule of Law: Rule of law is essential to the success of
any modern society, whether in prosecution and conviction of
TIP offenders, in bringing to justice terrorists, in creating
an attractive investment climate, or in enhancing the rights
and protecting the rights of citizens. Stable democratic
governance is critical to strong relations with major
partners, including the US, as well as to important reform
efforts currently underway in key institutions such as the
Armed Forces of the Philippines and the Philippine National
Police.

IF ASKED
--------------


14. (SBU)

-- Alleged rape case: Six U.S. Marines are now under
investigation by Philippine officials as well as by US
military authorities for involvement in an alleged rape in
Subic on November 1. They remain in U.S. custody under the
terms of the Visiting Forces Agreement (VFA). Some members
of the press have attempted to claim that our criticisms of
the GRP's performance on TIP is hypocritical given the
alleged involvement in a sex crime. Our consistent line is
that the VFA provides the mechanism for U.S. and Philippine
authorities to work together to determine the facts of the
case. We intend fully to comply with the terms of the VFA;
we are committed to seeing justice done; and the accused
should be presumed innocent until proven guilty. Just as in
TIP cases, we want to see justice prevail, while protecting
the legal rights of the accused.

-- Espionage case: The October 2005 arrest in the United
States of an FBI employee of Filipino descent for espionage
made front page news for weeks in the Philippines, focusing
on his alleged ties with Opposition leaders Senator Panfilo
Lacson and former president Joseph Estrada. Alleged Embassy
reporting was quoted in the press, apparently designed to
create discord between the government and the United States.
This case has received considerable press attention and the
press may ask you about it. Our consistent line is that the
issue remains before the courts and we cannot comment on law
enforcement matters.

Visit Embassy Manila's Classified website:
http://www.state.sgov.gov/p/eap/manila/index. cfm
Jones