AMBASSADOR ENGAGES PHILIPPINE SENATE PRESIDENT ON

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 001784 SIPDIS E.O. 12958: DECL: 07/27/2018 TAGS: PGOV PREL RP SUBJECT: AMBASSADOR ENGAGES PHILIPPINE SENATE PRESIDENT ON LEGISLATIVE ISSUES: PEACE PROCESS, TRAFFICKING IN PERSONS, TRADE AGREEMENTS Classified By: Ambassador Kristie A. Kenney, Reasons 1.4 (b) and (d) ¶1. (C) SUMMARY: The Ambassador on July 24 engaged Philippine Senate President Manuel "Manny" Villar in a broad-ranging discussion over a private breakfast of issues likely to come up soon after the Senate reconvenes July 28. Villar described how, for very different reasons, the road ahead looked difficult for both a trade agreement with Japan and family-planning legislation. The Senate President expressed his concern over calls to rescind the country's Expanded Value Added Tax (EVAT) in the face of rising food and fuel prices; the tax has been a key source of public revenue for three years. Regarding the upcoming elections in the Autonomous Region of Muslim Mindanao (ARMM),Villar described how incumbent local leaders likely to be affected were already sharing their concerns, and that in his view any entity that succeeded the ARMM in the wake of a final peace deal must govern more effectively if heretofore-marginalized Muslim areas were to develop and stabilize. The Ambassador strongly underscored how a lasting peace would bring significant benefits to all of the Philippines. The two-hour breakfast conversation concluded with Senator Villar outlining his worries over the trafficking and mistreatment of Overseas Filipino Workers (OFWs),who are often duped by unscrupulous recruiters and then brutalized by their employers in the Middle East. END SUMMARY. ¶2. (C) Looking ahead to the upcoming Senate session, Villar anticipated few changes in the Senate's makeup. He reflected with pride on how the "hard-working" Senate had passed 36 bills during its previous session, including 12 of the 13 supported by President Arroyo, who he said he had invited to visit the Senate on July 30. Villar opined that, partly due to a simple legalistic oversight that could have been easily prevented, the prospects looked poor for passage of the Japan-Philippine Economic Partnership Agreement (JPEPA). He explained that environmental groups were stridently opposed to the trade agreement because it included terms for trade in toxic substances -- although both nations' constitutions proscribe any such trade. He added that, inasmuch as the Japanese Diet had already ratified the agreement, it was now likely too late to amend its text and excise the offending section. ¶3. (C) Turning to the Reproductive Health and Population Development Act pending in the Senate, Villar lamented that although everyone understood that the Philippines' rapid population growth (over two percent per year) was outstripping the expansion of economic opportunity, President Arroyo's backing of the "off-the-deep-end" hardline position held by the Catholic Bishops Conference of the Philippines (CBCP) had contributed to a charged atmosphere surrounding the issue and made passage of the bill "a real problem." Villar reflected that the shrill tenor of debate over birth control made the controversy over trade with Japan look tame by comparison. ¶4. (C) Referring to recent steep increases in the cost of food and fuel that have led to calls for the repeal of the Expanded Value Added Tax (EVAT),Senator Villar said that although such a move might look good politically and "put money in the pockets" of hard-pressed consumers, revenues from the tax since its 2005 implementation had simply become too significant a source of funding for infrastructure and social services to contemplate its revocation. He went on to say that revocation of such a tax might pose little problem in a First World nation, but the Philippines doing so would send the wrong signal to investors and give the appearance of fiscal irresponsibility. Villar outlined plans to discuss his views on the EVAT with President Arroyo. ¶5. (C) Discussion turned to upcoming August 11 elections in the Autonomous Region of Muslim Mindanao (ARMM). Although Villar professed to be less than fully informed on all the relevant facets of the issue, he reviewed with the Ambassador the pros and cons of the postponement proposed by President Arroyo, noting that while moving back the elections might boost progress in the peace process, it would leave in place ARMM elected officials whose performance had -- in his view -- been less than stellar. Villar described how mayors and governors of areas that might be affected by an expanded ARMM had been in frequent contact recently, expressing their concerns; the Ambassador offered her reassurances that while reaching a lasting peace might be difficult, a permanent peace agreement would be good not just for Mindanao and the Sulu Archipelago, but for the country as a whole. Villar noted that whatever governmental entity succeeded the ARMM must be encouraged and assisted by the government and international community to be more effective than the current MANILA 00001784 002 OF 002 ARMM. ¶6. (C) When asked by the Ambassador for his views on the 2010 presidential election, Villar said that he envisioned President Arroyo stepping down at the end of her term and returning to private life "unless Erap runs," referring to the possible candidacy of former President Joseph "Erap" Estrada (1998-2001). Villar speculated that Estrada, who was convicted under the Arroyo administration in September 2007 of plunder and sentenced to life in prison, but later pardoned by President Arroyo, might seek revenge for perceived wrongs at the hands of the Arroyo administration, prompting Arroyo to remain in office. (Estrada was driven from office by a "people power" revolution in 2001 and succeeded by President Arroyo.) Knowing that Villar talks regularly to Estrada, Ambassador wondered whether Estrada might be better advised to focus on being a good "former" President. The Ambassador said that, given his conviction on plunder grounds, he would be unlikely to have good credibility as a candidate. ¶7. (C) Lastly, Senator Villar commented on highly-publicized recent cases of Overseas Filipino Workers (OFWs) being subjected to abuse by employers in the Middle East. He outlined examples where unscrupulous recruiters had sent girls as young as 13 to serve as domestic workers in Middle Eastern countries, and described how he had personally paid to repatriate 15 such individuals. Villar postulated that the solution might entail a ban on sending Filipinos to work in three or four nations in particular. ¶8. (C) COMMENT: Villar has made no secret of his plans to run for president in 2010. In the course of this conversation, he frequently referred to his business background and penchant for solving problems rather than engaging in rhetoric. In the past we have found the somewhat introverted Villar to be reluctant to engage with us. He is increasingly more talkative and interested in dialogue with us. Our efforts to engage him seem to be paying off. At this breakfast, he happily drank coffee and shared his thoughts on fellow senators, world politics, vacation plans, and legislation. KENNEY