SCENESETTER FOR ADMIRAL MULLEN'S VISIT TO THE

C O N F I D E N T I A L SECTION 01 OF 04 MANILA 001255 SIPDIS STATE FOR EAP/MTS USPACOM ALSO FOR FPA SECDEF/OSD/ISA/AP FOR TOOLAN E.O. 12958: DECL: 05/20/2018 TAGS: MARR MOPS PINS PREL PTER RP SUBJECT: SCENESETTER FOR ADMIRAL MULLEN'S VISIT TO THE PHILIPPINES Classified By: Ambassador Kristie A. Kenney; reason 1.4 (b) and (d) ¶1. (C) SUMMARY: Admiral, we appreciate your engagement with Philippine officials at Shangri-La and your subsequent visit to the Philippines. The Philippines has undergone many positive changes since the last visit of the Chairman of the Joint Chiefs to the Philippines in 2002, many as a result of sustained U.S. assistance over the last six years. President Arroyo maintains her political strength, in part due to robust economic growth. The Philippine Armed Forces have scored significant successes against terrorists in the southern Philippines, while supporting the Philippine government's efforts to make peace with Muslim insurgents. Philippine Defense Secretary Teodoro has taken active control of defense reform, with positive results. On May 12, General Alexander Yano became the Chief of Staff of the Philippine Armed Services, replacing General Hermogenes Esperon, who was put in charge of the peace process with Muslim insurgents. We look forward to showing you the great progress U.S. and Philippine forces have made in defeating terrorists in the area through a combination of hard and soft power approaches. Increased security has allowed USAID and other USG agencies to implement development projects in areas prone to terrorist recruitment. You will have an opportunity to discuss key strategic issues such as our shared counterterrorism fight and regional concerns, including the humanitarian crisis in Burma, with President Arroyo at Malacanang Palace in Manila. END SUMMARY. -------------- PHILIPPINE POLITICS -------------- ¶2. (C) Philippine politics remains unsettled, but President Gloria Arroyo's administration has weathered several scandals. She retains a firm grip on the House of Representatives and among a large majority of provincial governors and local mayors. Her relationship with top security officials remains strong, and military and police personnel have largely kept out of political debates and stayed focused on their security roles. -------------- ECONOMICS AND TRADE -------------- ¶3. (C) Philippine GDP grew by 7.3% in 2007, the fastest pace of growth in over three decades. Growth was fueled by increased government and private construction expenditures, a robust information communications technology industry; improved agricultural harvests; and strong private consumption, spurred in part by $14.4 billion in remittances from overseas workers (equivalent to about 11% of GDP). Record economic growth and an improved image moved the Philippines up five places to 40th in the latest World Competitiveness Yearbook rankings, its best performance in a decade. GDP growth is expected to slow in 2008, but still reach between 5-6%. President Arroyo has an impressive reform agenda -- privatize the electric power sector, build infrastructure, increase education funding, and reduce business red tape -- but still faces significant hurdles, particularly in improving the investment climate. The U.S. remains the Philippines' largest trading partner, with over $17.1 billion in two-way merchandise trade in 2007. -------------- MILITARY ENGAGEMENT -------------- ¶4. (C) With a large Joint U.S. Military Assistance Group (JUSMAG),Defense Attach Office, and approximately 550 Joint Special Operations Task Force-Philippines (JSOTF-P) personnel, our military engagement is broad and far reaching. All military personnel are integrated into the Country Team, and their input shapes decisions and policy. Apart from JUSMAG's traditional role of training and military sales, we have focused on assisting the Philippine Armed Forces with revising their doctrine to promote ethics and human rights. At the same time, members of JSOTF-P work side by side with Philippine troops, advising and assisting in counterterrorism operations. Our military cooperates closely with U.S. law enforcement and intelligence agencies to achieve important MANILA 00001255 002 OF 004 successes in the counterterrorism efforts. This cooperation has resulted in the death or capture of eight key terrorist leaders and over 200 other terrorism suspects since August 2006, including the deaths of Abu Sayyaf Group leaders Khadaffy Janjalani and Abu Solaiman. Recently, Philippine Forces mounted a surgical strike that destroyed a known terrorist camp in Jolo that had served as a safe haven for Abu Sayyaf Group and Jemaah Islamiyah (JI) members for almost two years. ¶5. (C) Several large-scale bilateral exercises are conducted each year between U.S. and Philippine forces, and the increase in humanitarian activities associated with these exercises has been welcomed by the Philippine government. While the Army and Marines have had the most engagement with Philippine counterparts over the last six years, we have begun to see a sharp up-tick in the number of ship visits in the last two years. The numerous community relations events associated with a growing number of ship visits -- from 56 in 2006 to more than 120 estimated for 2008 -- have leveraged our ability to provide humanitarian assistance to areas otherwise difficult to reach. The recent visit of the USS Blue Ridge was very successful and we look forward to the return visit of the USNS MERCY to the Philippines from May 29 to June 17, when U.S., Philippine, and partner nation medical personnel will treat an estimated 30,000 people. While engagement between the U.S. and Philippine militaries continues to grow, we must be mindful there is small, but vocal group of leftists and political elites who mistakenly believe that we are seeking to re-establish permanent military bases here. As such, local sensitivities regarding this issue may at times cloud the very positive benefits of this on-going engagement. -------------- -------------- ARMED FORCES HAVE STRONG CIVIL AND MILITARY LEADERSHIP -------------- -------------- ¶6. (C) At the Shangri-La Dialogues in Singapore, you will meet Philippine Secretary of National Defense Gilberto Teodoro and Chief of Staff of the Armed Forces LTG Alexander Yano. As a member of the Philippine Military Academy Class of 1976, Yano enjoys a particularly close relationship with Secretary Teodoro, an adopted member of the Class of '76 and Air Force reserve officer. Yano is well known to the Ambassador and the Embassy, and the mission has had an excellent relationship with him throughout his career -- most recently in his position as Commanding General of the Army, in which he was active in Philippine Defense Reform. Secretary Teodoro, the youngest Defense Secretary in Philippine history, is a Harvard-educated lawyer and former Congressman and Wall Street investment banker. He is bright, articulate, and committed to building the capability and prestige of a military firmly under civilian control. -------------- GENERAL YANO -------------- ¶7. (C) General Yano was installed as the 38th Chief of Staff of the Armed Forces on May 12, 2008, after 10 months as Commander of the Philippine Army. Yano is considered ONE of the most capable and experienced officers in combating terrorism. As Chief of Staff, Yano has vowed publicly to intensify the fight against the Abu Sayyaf Group and the New People's Army, and has been unambiguous in his commitment to upholding the rule of law, "even in the face of the fiercest battles." Following up such statements with concrete actions will be key for Yano to establish himself as a leader who promotes respect for human rights at all levels in the Armed Forces and to have success implementing reforms begun by his predecessor to clean up the military's image as a human rights violator. Yano is the first Mindanao-born military officer to assume the top position in the military. He is seen as loyal to President Arroyo and a strong advocate against military adventurism and has undergone training for various military career fields, including Special Forces Operations and Intelligence. Yano, who graduated from the U.S. Infantry Officer Advanced Course in 1986, engages easily with U.S. civilian and military officials and interacts well with PACOM. We judge he will further strengthen bilateral activities. General Yano tends to be initially quiet and reserved. You will find a warm personality and quiet sense MANILA 00001255 003 OF 004 of humor as he relaxes in the course of a conversation. -------------- SECRETARY TEODORO -------------- ¶8. (C) Secretary Teodoro is polished, smart, and very pleasant. He is a talented public speaker who connects well to audiences at all levels. Many believe he is a future Presidential contender in the Philippines. The 43-year old Teodoro is very much at ease with Americans and has built a very good relationship with the Armed Forces of the Philippines and with President Arroyo. Teodoro's wife is a member of the Philippine Congress. ¶9. (C) In an encouraging sign of deepening support for the ongoing armed forces overhaul, Secretary Teodoro took personal control of Philippine Defense Reform last November, and the Philippine government plans to spend about USD 100 million annually through 2012 to fund defense reform initiatives. To date, the Philippines has spent over $400 million on defense reform in the last three years, including $28 million to match U.S. foreign military financing. Teodoro is personally involved in the process down to the working level, and is currently putting his own personnel into key positions of authority. A major outcome of defense reform will be insulating the decisionmaking process so that competent staff are conducting planning, acquisition, and budgeting activities "without interference from knee-jerk or irrational inputs," as Teodoro has emphasized. -------------- MINDANAO: THE PEACE PROCESS -------------- ¶10. (C) The Philippine government continues its efforts to work out a comprehensive peace agreement with the insurgent Moro Islamic Liberation Front (MILF),even as it seeks to fully implement its 1996 deal with the Moro National Liberation Front (MNLF). While progress on both tracks is fitful, a peace deal this year with the MILF still appears a possibility, though difficult negotiations on governance and revenue sharing remain. It is clear from our discussions with both government and insurgent leaders that all sides recognize the importance of an enduring peace for the long-term prosperity of Mindanao. President Arroyo just announced that former Chief of Staff General Esperon will become the new cabinet-level secretary responsible for peace processes with both Muslim insurgents and with the Communist New People's Army. -------------- USAID'S COMMITMENT TO MINDANAO -------------- ¶11. (U) Since the mid-1990s USAID has implemented a sizable and highly effective program throughout the island of Mindanao and the neighboring Sulu Archipelago provinces of Basilan, Jolo, and Tawi-Tawi. During this period, approximately two-thirds of all USAID resources for the Philippines have been committed to these areas. USAID sponsored activities in these areas include infrastructure development, school computerization, HEALTH and education improvement, environmental management improvement, former combatant reintegration, and governance improvement. Under the Growth with Equity in Mindanao-2 Program, USAID has financed the construction of 830 community level and 40 regional impact infrastructure projects throughout the conflict-affected communities of Mindanao with the objective of encouraging economic growth and demonstrating the continuing commitment of both the Philippine and the U.S. governments to the peace process. -------------- UNLAWFUL/EXTRAJUDICIAL KILLINGS -------------- ¶12. (C) Extrajudicial killings remain ONE of the thorniest issues for the Arroyo administration, with critics charging that rogue elements of the Philippine police and military are responsible for killings. President Arroyo has spoken out consistently and strongly on the issue and has taken a MANILA 00001255 004 OF 004 variety of steps to address the problem, including the creation of active police and prosecutorial task forces and investigative commissions. By the end of 2007, these steps, as well as intensified domestic and international attention to the problem, appeared to have had a measurable impact, with government agencies and human rights NGOs reporting a significant decline in the number of extrajudicial killings during the year. AFP Chief of Staff General Yano's first public speech emphasized the importance of human rights and rule of law in the military. We expect him to push to further improve efforts to address extrajudicial killings. The Embassy carefully vets all proposed military and law enforcement personnel about to receive U.S.-funded training both internally and with relevant Philippine authorities to comply with the terms of the Leahy Amendments. The Mission is currently working with Department of Justice officials regarding prosecutorial assistance to ensure perpetrators are brought to justice. 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