SOME MINDANAO BUSINESSES BOOM DESPITE DANGERS

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 003307 SIPDIS SIPDIS STATE FOR EAP/MTS E.O. 12958: DECL: 10/04/2017 TAGS: PGOV RP ECON BEXP SUBJECT: SOME MINDANAO BUSINESSES BOOM DESPITE DANGERS Classified By: DCM Paul W. Jones, for reasons 1.4 (a) and (d) ¶1. (U) Summary: The DCM led an Embassy team to General Santos City on September 21 to focus attention on U.S. support for commerce in Mindanao. The DCM delivered the keynote address at a 500-strong gathering of the region's chambers of commerce. He told leaders that the recently announced $190 million in U.S. assistance demonstrates our interest in partnering for business development in Mindanao and that growth and peace are mutually supportive. The Embassy party toured a tuna processing plant owned by Phillips, an American company, and an agricultural/aquacultural complex owned by a provincial governor's family. To highlight our commitment to infrastructure development, the team also inaugurated a USAID-supported footbridge that improves the quality of life in rural Mindanao and also allows town residents to bring products to market. Media interviews and convention coverage enabled the DCM to broadcast the business development message broadly and to underscore that our military is committed to playing a supportive role at the invitation of the Philippine government. End Summary. GENERAL SANTOS CITY: OPEN FOR BUSINESS -------------- ¶2. (U) The Mindanao Business Conference (MBC) marked its 16th anniversary with a record number of attendees (497) at its two-day annual meeting in General Santos City. The U.S. supported the founding of MBC and has sent high-level officials to every conference. This year the DCM led an Embassy party to show continued support for greater economic opportunities in the region. General Santos City is a port city of 450,000 located at the center of three provinces known as the SOCSKSARGEN region (South Cotabato, Sultan Kudarat, Sarangani and General Santos). The city's strategic location at the southern end of Mindanao, its active international port, thriving fish export business, and relatively stable civil order make it an important area for leveraging business opportunities. SOCSKSARGEN boasts dynamic politicians as well -- notably an up-and-coming governor and a successful mayor. THE BUSINESS UNITY DANCE -------------- ¶3. (U) At the conference, the DCM had the opportunity to talk extensively with Mayor Pedro Acharon Jr. and Philippine Chamber of Commerce and Industries (PCCI) President Samie Lim. Both Acharon and Lim asserted that the region is on the path to prosperity, but perceived safety threats have hampered investment, tourism, and economic growth. In the keynote address, the DCM assured the conference participants that the U.S. would continue to partner with them in building infrastructure and enhancing security for a growing and sustainable economy, naming a number of resources and industries with great potential. Regional television covered the event including the speech, his comments to reporters after the event, and -- in a light moment -- the now requisite "Papaya Dance" performed with the mayor, local dancers, and distinguished guests. FISHING FOR A STRONG EXPORT BASE -------------- ¶4. (C) The Embassy team toured the extensive grounds of Alsons Aquaculture Corporation, run by the prominent Alcantara-Dominguez families. The company is a leading exporter to the U.S., Europe, and Japan of milkfish and other fish. Along with Alsons' officials, the Embassy party met with Sarangani Governor Miguel "Migs" Dominguez. Alsons executives explained that their investments include operations in Davao, Iligan, and Zamboanga, and they are exploring the development of a cassava processing facility in predominantly Muslim areas as a source for ethanol. Governor Dominguez stated that a peace agreement between Moro Islamic Liberation Front (MILF) and the Philippine government was a challenge due to the diversity of the population, and a peace agreement would have little effect without viable alternatives to existing livelihoods. He questioned the local impact of a peace agreement, stating that local officials bear the real responsibility for maintaining peace and order through enforcement of the law and by negotiation. ¶5. (U) The Embassy team visited the facilities of a second major exporter, Phillips Seafood Philippines Corporation, a subsidiary of Maryland-based Phillips Foods, Inc. (In General Santos City, the company does business under the name Eastern Visayas Seafood Corporation). The Phillips staff showed their cold storage facilities where they package MANILA 00003307 002 OF 002 yellow-fin tuna for international shipping. USAID's Growth with Equity in Mindanao program helped attract Phillips to the region in 1992. U.S. Congressman Ruppersberger of Maryland expressed interest in Phillips during his visit with Codel Reyes in August 2007. CONSTRUCTIVE U.S. ROLE IN DEVELOPMENT -------------- ¶6. (U) The team also attended the inauguration of a footbridge in Sarangani that enables residents in the rural town of Libi to get to school and to transport products to market, even when rains flood the river. The project is one of many in the area that demonstrates how a USAID contribution (75% in this case) and local partners can tangibly improve the quality of life. The DCM told inauguration attendees that the footbridge showed our commitment to partnerships and infrastructure projects that support economic opportunity and improved quality of life. The Embassy team joined Vice Governor Steve Solon and Malapatan Mayor Aida Singcoy in cutting the ribbon. LOCAL MEDIA REACTION -------------- ¶7. (SBU) Coverage of the MBC noted that the DCM's presence showed U.S. commitment to expanding trade and business. Following the MBC, during a brief media stand-up, the DCM was asked about a reported incident in which U.S. military servicemen in the company of Armed Forces of the Philippines were seen with weapons while wearing civilian attire in General Santos City. The DCM took the opportunity to underscore that U.S. troops are here at the invitation of the Government of the Philippines and that they act only in a supportive role to the Philippine Armed Forces; the incident was a misunderstanding with no disrespect intended. ¶8. (U) Comment: Mindanao business leaders generally expressed confidence in the region's status as a "food basket," the economy's ability to diversify, and Mindanao's promise as a tourist destination. MBC organizers confronted head-on the perception that security problems would limit development by admitting that "our greatest challenge is the presence of troublemakers in our midst," as Mayor Acharon put it, but also argued that such problems should not discourage investment for the greater good. The visit to both the Alcantara-Dominguez complex and the Phillips-owned plant showed that the export market for food products is vibrant, and profits from such businesses will likely be re-invested into diversified enterprises in the future. Visit Embassy Manila's Classified SIPRNET website: http://www.state.sgov.gov/p/eap/manila/index. cfm You can also access this site through the State Department's Classified SIPRNET website: http://www.state.sgov.gov/ KENNEY