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