SONA 2006: ARROYO PROJECTS OPTIMISM, WANTS TO SPEND

UNCLAS SECTION 01 OF 02 MANILA 003098

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM PINS SOCI PTER RP
SUBJECT: SONA 2006: ARROYO PROJECTS OPTIMISM, WANTS TO SPEND


1. (SBU) Summary. With a buoyant air and an unusual high
tech power point presentation, President Arroyo laid out
ambitious development goals for four new supra-regions in the
Philippines during the remainder of her term, and asked all
to achieve together a "prosperous and united" Philippines
under this "pro-poor, pro-growth, pro-peace" policy. She
highlighted USG assistance, notably the Millennium Challenge
Corporation's new program but also USAID assistance on
trafficking in persons and overall military and developmental
assistance that was transforming Mindanao. She denounced
extrajudicial killings and called for the culprits to be
brought to justice. In an apparent reference to a new
impeachment effort, she said she was "game" for those who
want to "pick up old fights." She promised hundreds more
Philippine citizens would soon be repatriated from Lebanon.
Separately, the Senate, as expected, unanimously elected
Manny Villar as its new president, replacing Frank Drilon.
End Summary.


2. (U) Amid heavy security, President Gloria Macapagal
Arroyo gave her sixth State of the Nation Address (SONA) to a
joint session of Congress on July 24. She thanked all
members who had made tough choices over the past year to
legislate "critical fiscal reform" measures. She cited
increased tax revenue, 22 straight quarters of GDP growth,
and lifting 20 million people out of poverty as special
achievements in recent history. While noting that she did
not seek to discuss politics, she thanked the public for
resisting "pathetic" calls to undermine the government and
the Armed Forces of the Philippines and Philippine National
Police for upholding the law and opposing "mutineers."


3. (U) The centerpiece of her high tech, powerpoint speech
was an ambitious and lengthy rundown of major new
infrastructure initiatives in four new super-regions:
Northern Luzon (agribusiness); Metro Manila (urban and
commercial modernization); Central Philippines (tourism);
and, Mindanao (natural resources and agribusiness). In
addition, she described a new "cybercorridor" from Baguio to
Cebu. She indicated that she would like to see the
completion of most projects by the end of her term in 2010,
but did not provide details about funding or budget
priorities, nor did she specifically call on Congress to pass
the 2006 or 2007 budgets.


4. (U) While acknowledging that the Philippines "deserved a
world-class Constitution," she sidestepped last year's
advocacy for charter change, apart from repeatedly
acknowledging the important role of Local Government Units
and the need for them to have more resources and authority.
She denounced extrajudicial killings, underscoring that the
Philippines had ended judicial killings with the abolition of
the death penalty in 2006, and urged that eyewitnesses come
forward to ensure that those responsible for EJKs face
justice. To the consternation of many commentators after the
fact, she nonetheless singled out for an ovation General
Jovito Palparan, the serving AFP flag officer most personally
associated in the public mind and media accounts with alleged
EJKs by security forces. She made a one-sentence call for
electoral reform, primarily through automation. In an
apparent reference to a new impeachment effort, she said she
was "game" for those who want to "pick up old fights," but
she called instead to join hands, warning that the "survival
of our country" could be at stake.


5. (U) Early in her remarks, President Arroyo acknowledged
the $21 million grant from the Millennium Challenge
Corporation to fight corruption, adding that her government
will match the grant. She excoriated human trafficking,
while noting USAID assistance had led to the successful
convictions of traffickers here in the Philippines and helped
ensure that the Philippines was no longer on the USG's
"priority watch list." She also presented other examples of
successful USG assistance, such as the successful Balikitan
exercises in Basilan and Jolo and the "Arms to Farms"
program, along with thanking other international donors.


6. (U) The President touched an emotional chord when she
described the government's efforts to help Overseas Filipino
Workers in Lebanon, and reported that another 500 would be
repatriated in the next four days (on top of the 232 who
returned over the weekend).


7. (U) Heavy rains may have deterred a larger turnout, but
about 5,000 to 8,000 demonstrators -- described by
eyewitnesses as "bedraggled and disheartened" -- were present
on the streets near the Congressional compound in Quezon
City, well guarded by an estimated 16,000 police and security
forces. There were no reported incidents. There were also
numerous groups, apparently representing Local Government
Units, cheering the President and holding banners of support.

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8. (U) Earlier in the day, the Senate had formally convened
its third session in the 13th Congress. As expected, Senate
President Franklin Drilon, honoring what he admitted was &a
gentleman's agreement,8 relinquished his presidency
&without rancor or bitterness8 and subsequently nominated
Senator Manuel &Manny8 B. Villar, Jr. as the new president.
In a sign of bipartisan support, pro-Administration Senator
Pilar Juliana Cayetano and Opposition Senator Jinggoy Estrada
seconded the nomination. Without other nominations, Villar
was elected by acclaim. (Not since 1953 has a former Speaker
of the House -- Villar,s term was 1998-2000 -- become Senate
President.) Senator Panfilo Lacson asked, however, how the
Senate could now be divided into Majority and Minority sides
since the entire Senate had voted for the same president; his
inquiry was referred to the Committee on Rules.


9. (SBU) Comment: The contrast to the 2005 SONA, in the
midst of the President's political nadir and fight for
survival, was striking. This year, the President was
buoyant, seemingly brimming with confidence, and boldly
optimistic in her vision for the Philippines. She was
nonetheless thin on specific legislative priorities, apart
from support for a biofuels bill and calls for adequate funds
for electoral change and for stamping out "corruption and
terrorism." She did not, unfortunately, reiterate her
Administration's support for counterterrorism legislation now
awaiting Senate consideration.
Kenney