ADMIRAL FARGO'S TALKS WITH SECRETARY OF NATIONAL

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 000683 SIPDIS DEPT FOR EAP/PMBS NSC FOR GREEN ASD/ISA/AP FOR ALLEN E.O. 12958: DECL: 02/11/2015 TAGS: PREL MARR MOPS RP SUBJECT: ADMIRAL FARGO'S TALKS WITH SECRETARY OF NATIONAL DEFENSE CRUZ REF: A. MANILA 650 ¶B. MANILA 547 Classified By: (U) Political Officer Paul O'Friel for reasons 1.4(b) and (d). ¶1. (C) SUMMARY. Secretary of Defense Cruz presented to Admiral Fargo in February 9 discussions a new framework for US-RP counterterrorism cooperation. "Kapit Bisig" would encompass humanitarian/civil affairs, exercises, and operations. Cruz expressed confidence that such a framework, which incorporates existing activities, would meet both US and RP legal requirements. "Kapit Bisig" would include a major humanitarian/civil affairs effort targeting 500 villages in vulnerable areas of Luzon, the Visayas, and Mindanao. Cruz said he would follow up on Ambassador's suggestion that senior-level GRP representatives brief donors on this initiative at the March 8 Davao donor's conference. END SUMMARY. ¶2. (C) In conjunction with his February 9 call on President Arroyo (ref a),Admiral Thomas Fargo, Commander of the US Pacific Command, met separately with Secretary of National Defense Avelino Cruz and Armed Forces of the Philippines (AFP) Chief of Staff General Efren Abu, and held a roundtable discussion on counterterrorism and Philippine Defense Reform (PDR) issues with Cruz, Abu, and their senior staff. Ambassador Ricciardone, JUSMAG Chief Velasco, FPA Huso, and Poloff O'Friel (notetaker) also attended the meetings. TARGET FOR ENDING INSURGENCIES AND TERRORISM -------------- ¶3. (C) Cruz thanked Admiral Fargo for his help with PDR, which, along with the newly launched Capability Upgrade Program (CUP),represented the twin elements of Cruz's defense policy. He said he hoped to bring an end to the insurgencies and terrorism plaguing the Philippines within six to ten years. "We need to get beyond the mindset that insurgency is inevitable, and set a timetable and allocate resources to eradicate it," Cruz stated. Cruz welcomed Admiral Fargo's suggestion that Malaysia might prove receptive to beefing up its contribution to the International Monitoring Team (IMT) in Mindanao. He observed Malaysia, Indonesia, and the Philippines share a common interest in eliminating Jemaah Islamiyah (JI) safe havens, and instructed his staff to follow up on the issue. GOING SLOW WITH CHINA -------------- 
 ¶4. (C) In a separate talk with Chief of Staff Abu, Admiral Fargo asked about Chinese overtures. Abu said Beijing is seeking to establish regular military-to-military exchanges, port visits, and exercises, but indicated these initiatives are still very much in the exploratory stage. Admiral Fargo advised Abu to proceed cautiously, warning there is "no free lunch" in dealing with the Chinese. NO QUARTER FOR MILF REJECTIONISTS -------------- ¶5. (SBU) The roundtable laid out Secretary Cruz's priorities: Philippine Defense Reform; the Capability Upgrade Program; peace negotiations with the Moro Islamic Liberation Front (MILF); and national development. Ambassador cautioned Cruz not to regard the MILF as "good guys;" many are as bad as the JI. Cruz agreed, saying one motivation behind the peace process with the MILF was to distinguish between MILF commanders who supported peace and those who rejected it. He promised to "search out and destroy" any faction that refused to make peace. "KAPIT BISIG" -------------- ¶6. (C) Cruz presented a new framework, "Kapit Bisig" (Camaraderie),for RP-US military cooperation. Cruz said "Kapit Bisig" -- which rested on the three pillars of humanitarian/civil affairs, security assistance, and operations -- would allow the US and RP to work within their respective laws, yet still be effective. He noted ongoing discussions in the Philippine Senate drew a distinction between joint exercises focused on an external attack, e.g., Balikatan, and ongoing RP-US counterterrorism cooperation, which addressed an internal threat. While this evolving political discussion might produce a new counterterrorism agreement, "Kapit Bisig" offered a way forward. Admiral Fargo noted the plan embodied much of what the United States and the Philippines were already doing together, but put it in the context of an overall campaign. ¶7. (SBU) The humanitarian/civil affairs component of "Kapit Bisig" would focus on 500 priority barangays (townships) in vulnerable regions of Luzon, the Visayas, and Mindanao. Working with the Departments of Social Services, Agriculture, and Public Works and Highways, the AFP intends to build roads and schools, and bring water, electricity, and medical care -- through medical civic action programs (medcaps) and dental civic action programs -- to disaffected areas to address the root causes of terrorism and insurgency. Secretary Cruz said funds for the program would come from sale of the GRP's shares in San Miguel Corporation and some of the confiscated Marcos millions. Cruz said his goal is to demonstrate the sharp contrast between what the government and insurgents can provide. "We want to show people an alternative way of life," he said. ¶8. (SBU) Ambassador Ricciardone suggested the March 8 donors' conference in Davao offered an opportunity to build support for Cruz's initiative. Both Cruz and General Abu were intrigued by the possibility, and expressed interest in participation at a senior level, both to address and to hear the donors. ¶9. (C) The security assistance and operations components of "Kapit Bisig" would incorporate existing programs, such as training for light infantry battalions, operations/intelligence fusion, and logistics, mobility, and medical improvements. (Note: MG Pedro Ramboanga, the AFP J3, credited RP-US intelligence fusion as a significant contribution to the decline of JI numbers in the Philippines. End note.) ¶10. (C) Cruz wondered if a new process was needed in the Mutual Defense Board (MDB) to "streamline" policy issues, should they arise. Ambassador suggested it was better to keep the MDB process "lean and mean," by keeping official approval procedures at the lowest possible ranks. The default US position on any question was "if it's not prohibited, let's do it." PDR --- ¶11. (SBU) In briefing PDR, DND Assistant Secretary Robert Nuqui emphasized the need to "harvest low hanging fruit," pointing to successes in reorganizing the DND and AFP staffs, implementing a multi-year defense strategy, and pushing pending legislative bills to extend the tenure of the Chief of Staff and major service commanders and to reform the AFP pension system. Looking ahead, Nuqui said the DND had to work with the AFP to develop ways of effectively measuring PDR successes. Metrics, such as operational rates, had to show the match between mission requirements and strategy. Nuqui added DND hopes to incorporate PDR into the regular schedule of MDB talks to ensure its full integration into the bilateral agenda. UPCOMING VISIT OF USNS MERCY -------------- ¶12. (U) Admiral Fargo briefed Cruz on the possibility the hospital ship, USNS Mercy, might stop in the Philippines during late March on its return from disaster relief efforts in Indonesia. Cruz warmly welcomed the potential visit. Chief of Staff Abu noted the AFP's priorities might be Quezon and Aurora provinces in eastern Luzon, which are still recovering from the damage wrought by the December 2004 typhoons, and eastern Samar and eastern Leyte. Abu said his staff would work with JUSMAG to develop a plan of action. ¶13. (C) COMMENT. "Kapit Bisig" appears to be a genuine effort by Cruz to find a way to institutionalize and defend US-RP counterterrorism cooperation against potential domestic critics. It incorporates and builds upon the earlier "Project Bayanihan," which covered successful counterterrorism cooperation in Basilan. Cruz continues to impress us with the innovative means he has developed to achieve his stated objective of ending the insurgent and terrorist threat in the Philippines. END COMMENT. ¶14. (U) Admiral Fargo did not have the opportunity to review this telegram before his departure. Visit Embassy Manila's Classified website: http://www.state.sgov.gov/p/eap/manila/index. cfm Ricciardone