U.S. SUPPORT FOR MINDANAO CHAMBERS OF COMMERCE

UNCLAS SECTION 01 OF 02 MANILA 004523 SIPDIS SIPDIS STATE PASS USDA/FAS STATE FOR EB/CIP AND EAP/MTS USDOC FOR 4430/ITA/MAC/SBERLINGUETTE E.O. 12958: N/A TAGS: ECON ECPS ETRD EINV RP SUBJECT: U.S. SUPPORT FOR MINDANAO CHAMBERS OF COMMERCE -------------- Summary -------------- ¶1. As part of the Embassy's broader Mindanao strategy, the U.S. Commercial Service in Manila hosted a roundtable meeting on October 20 with representatives of twelve Chambers of Commerce from Mindanao. Ambassador Kenney met with the group and exchanged views of prospects for economic growth and closer business ties between U.S. firms and this troubled region. As part of this program, The U.S. Foreign Commercial Service in Manila signed Memoranda of Understanding with the Marawi and Tawi-Tawi Chambers of Commerce. With Memoranda of Understanding with 16 Mindanao-based Chambers of Commerce, the U.S. Foreign Commercial Service is creating a framework for building closer business ties and promoting peace and prosperity in this region. End Summary. -------------- -------------- Ambassador Highlights Mindanao's Economic Potential -------------- -------------- ¶2. On October 20, the Ambassador witnessed the signing of Memoranda of Understanding between the U.S. Foreign Commercial Service in Manila (FCS Manila) and the Marawi and Tawi-Tawi Chambers of Commerce, both of which are located in the Autonomous Region in Muslim Mindanao. Representatives from twelve other Mindanao Chambers, FCS Manila, the Foreign Agricultural Service (FAS),USAID, and ECON attended the event. The Ambassador praised Mindanao's rich variety of cultures and diversity of talent. She highlighted the need for Mindanao to continue to focus on infrastructure development and the ongoing peace process. Chamber members expressed strong appreciation for U.S. development assistance in Mindanao. The Ambassador noted the importance of planning for long-term economic prosperity, looking to the time when economic assistance is no longer needed. ¶3. Representatives of individual Chambers discussed issues specific to their regions. A representative from the Surigao Chamber noted that the mining industry has great potential in the region, and should be attractive to U.S. investment after the 2005 Supreme Court decision upholding the 1995 Mining Act allowing foreign mining companies in the RP. The representative from the Marawi Chamber discussed concerns about poverty and misconceptions about Muslims in the Autonomous Region in Muslim Mindanao and emphasized the need for continued U.S. assistance, particularly in education. The Tawi-Tawi chamber representative said he hoped the recent kidnapping and release of USAID contract employees in Sulu would not affect USAID programs in Mindanao. The Ambassador replied that the kidnappings were unacceptable and, while the USG will suspend work wherever conditions are unsafe, the USAID-funded programs in Mindanao will continue. Chamber representatives from General Santos City discussed the dominance of the tuna industry in their region and how their Mayor is looking for ways to develop other industries. -------------- -------------- U.S. Support for Business Development in Mindanao -------------- -------------- ¶4. One key aspect of Embassy Manila's strategy to promote peace and prosperity in Mindanao is to provide extensive support for Mindanao business development through programs administered by FCS Manila, USAID, and FAS. FCS Manila has now established MOUs with 16 Mindanao-based Chambers of Commerce to help U.S. companies partner with Mindanao-based firms and expand U.S. trade links in Mindanao. The MOUs are informal undertakings to develop trade opportunities, share business contacts, and engage in joint business promotion activities. USAID is providing assistance through the Growth with Equity in Mindanao (GEM) Program. The GEM Program is aiding the development of business support organizations, including business councils, 18 Chambers of Commerce, and producer associations. FAS programs focus on developing agricultural trade between the U.S. and the Philippines, and FAS has provided food aid worth approximately $200 million since 2000. During FY 2006, the U.S. is providing 69,000 metric tons of rice valued at $20 million through PL-480 Title I to support the Philippine government's programs in agricultural biotechnology and modernization. FAS also provides food assistance through grants to non-governmental organizations. -------------- Plans for Future Bilateral Trade Activities -------------- ¶5. To deepen relationships between U.S. business and the Mindanao Chambers, members suggested holding regular meetings to discuss issues in specific sectors, including tourism and information technology. A subsequent general meeting may be held, possibly during a U.S. trade mission to Manila or Cebu. Members also MANILA 00004523 002 OF 002 suggested that FCS Manila or the American Chamber of Commerce sponsor seminars on doing business in the U.S., focusing on specific product clusters. -------------- -------------- PCCI Dispute Emphasizes Importance of Individual MOUs -------------- -------------- ¶6. Separately, the Davao Chamber of Commerce disaffiliated itself from the national Philippine Chamber of Commerce and Industry (PCCI) and the PCCI Vice-President for Mindanao and all Mindanao-based PCCI governors resigned en masse on October 19. The Davao Chamber claimed the PCCI had unilaterally decided to reduce the number of Mindanao chamber regions from 8 to 5 on October 18, and accused the PCCI of disregard for due process and insensitivity to cultural differences in Mindanao. According to chamber leaders, the Davao Chamber has its own revenue sources and direct access to foreign funding, and can afford to be independent of the PCCI. Davao Chamber leaders also claimed that 16 Mindanao chambers intended to break from the PCCI. PCCI leaders downplayed these events, stating that they reduced the number of regions to ensure equal representation among chambers, and that only the Davao Chamber has resigned. ¶7. While the Embassy is not involved in any aspect of this dispute, these developments highlight the importance of MOUs with individual Mindanao chambers. The Embassy's roundtable meeting with the various MOU chambers from Mindanao helped to build relationships with these emerging business organizations in a positive and apolitical manner, and ensures opportunities for future dialogues. KENNEY