SCENESETTER FOR CODEL PRICE'S VISIT TO THE

UNCLAS SECTION 01 OF 03 MANILA 002626 SENSITIVE SIPDIS STATE FOR EAP/MTS E.O. 12958: N/A TAGS: OREP PGOV PINS PREL RP CH VM SUBJECT: SCENESETTER FOR CODEL PRICE'S VISIT TO THE PHILIPPINES REF: STATE 121421 MANILA 00002626 001.2 OF 003 ¶1. (SBU) SUMMARY: Embassy warmly welcomes CODEL Price to the Philippines! The relationship and spirit of partnership between the United States and the Philippines are strong. U.S. interests in this major non-NATO ally center on strengthening democracy, fostering economic growth, fighting terrorism, and providing superb services to our American and Filipino publics. The U.S. is the Philippines' largest trading partner, the largest investor, and the largest donor of grant foreign assistance. During your visit, you will be briefed by the Mission Country Team and meet with Philippine officials including the head of the National Intelligence Coordination Agency (NICA) and the Speaker of the House of Representatives, and you will also visit the American Cemetery in Manila. Our entire team looks forward to making your visit productive and useful. END SUMMARY -------------- BACKGROUND -------------- ¶2. (U) The Philippines, with almost 90 million people, has one of the fastest-growing populations in Asia. Metropolitan Manila, home to at least 12 million people, is the largest city in a country made up of over 7,000 mainly mountainous islands. Literacy (94%) remains high, although the standard of public education and other government services is weak. Filipinos are mainly Roman Catholic (83%) or otherwise Christian (10%) with a Muslim minority (6%) in the southern island of Mindanao, the Sulu Archipelago, and in Manila. Approximately 38 percent of Filipinos earn less than $2 per day, with a much higher percentage of Muslims in Mindanao eking out a living below this threshold. -------------- PHILIPPINES POLITICS -------------- ¶3. (SBU) President Gloria Macapagal Arroyo is a forceful politician who has faced a series of challenges to her rule, including unsuccessful impeachment efforts and low-level military coup attempts. She continues to attempt to initiate her political reform agenda while battling economic challenges. The President's political position improved last year after elections gave her allies a large majority in the House of Representatives, decreasing any real impeachment threat. Opponents continue to agitate in the Congress and filed yet another impeachment complaint against Arroyo on October 13, but this motion too faces almost certain defeat. Arroyo's term ends in 2010, and her Vice President and several senators are already lining up support to succeed her. -------------- COUNTERTERRORISM EFFORTS -------------- ¶4. (SBU) Three U.S.-designated terrorist organizations are active and dangerous in the Philippines, despite significant military and law enforcement successes against them over the past two years. Parts of the Southern Philippines' Muslim-populated regions remain a sanctuary for terrorists who are responsible for bombings in the Philippines and Indonesia and kidnapping and killing of Americans and Filipinos. Much of the work of this Mission's 30 USG agencies is focused on these parts of the Southern Philippines. The major thrust of U.S. development assistance is targeted on conflict-affected areas of the Southern Philippines, through USAID, to help reduce support for terrorists. A U.S. Joint Special Operations Task Force (JSOTF-P) of several hundred personnel provides direct support to the Philippine Armed Forces in key locations in the Muslim South, sharing intelligence, advice, and assistance. President Arroyo is justly proud that the Philippine military has scored successes against several top terrorist leaders in its focused military operations. Equally impressive are the Philippine military's success in separating local populations from insurgents through extensive civil-military and humanitarian activities. Separately, the New People's Army of the Communist Party continues to extort, bomb, and attack remote police and military outposts throughout the Philippines. MANILA 00002626 002.2 OF 003 -------------- HOMELAND SECURITY -------------- ¶5. (SBU) All USG agencies play important roles in Homeland Security at the U.S. Mission in the Philippines. We are proud of extraordinarily close synergies among the many law enforcement, intelligence, political-military, and economic agencies represented at this Mission. Key agency heads will meet with you after our overall Mission brief. The three Department of Homeland Security agencies represented in Manila have prepared short presentations of their work in the Philippines. -------------- PEACE PROCESS IN SOUTHERN PHILIPPINES -------------- ¶6. (SBU) A key element of our counter-terrorism agenda, and our support for a stronger, more outward-looking Philippines, is supporting the peace process with Muslim insurgents in the Southern Philippines. As peace talks aimed at greater local autonomy for Muslims progress, sanctuaries for terrorists diminish. Those talks came to an impasse this summer when a key territorial agreement was ruled unconstitutional, and the government and Muslim insurgents are still working to revive the process. Limited fighting in recent months has resulted in thousands of displaced persons living in temporary camps. While the U.S. has no official role in the peace talks, we continue to urge both sides to return to negotiations as soon as possible so displaced persons can return to their families and livelihoods. ¶7. (U) Development assistance from the U.S., complemented by increasing support from the World Bank, Japan, Australia, and others has established growing zones of peace and private sector-led growth in the Mindanao region of the Southern Philippines. About 60% of USAID's annual development assistance is channeled to conflict-affected areas of Mindanao to promote economic opportunities, build infrastructure, and carry out health, renewable energy, environment, education, local governance, and livelihood programs. These programs attack the conditions of poverty that provide breeding grounds for terrorists. USAID coordinates its activities with the U.S. military's Civil Affairs programs. Our exchange programs for students and community leaders offer a chance to interact with responsible and moderate Muslims. In response to the growing numbers of persons displaced by the government-rebel conflict in central Mindanao, the U.S. has announced an additional USD 2.5 million in assistance for displaced persons in the past four months provided through NGOs, including the donation of 1,500 tons of rice to the UN World Food Programme, the building of sanitation and water infrastructure to meet needs at crowded displaced persons camps, the provision of emergency health services, and the conducting of emergency health training for local and regional officials. -------------- -- HUMAN RIGHTS: COMBATING EXTRA-JUDICIAL KILLINGS -------------- -- ¶8. (SBU) President Arroyo has consistently expressed her commitment to resolving the complex and longstanding problem of extrajudicial killings (EJKs). The number of extrajudicial killings decreased dramatically in 2007 and 2008, but more still needs to be done, and the Embassy continues to press the issue at the highest levels of the Philippine government, while redirecting U.S. assistance to support government efforts. While many of these deaths and disappearances are more likely attributable to local disputes than to military or police action, it is clear that the government needs to do more to ensure that these crimes are fully investigated and that responsible parties -- whether or not they are connected to military or police -- are brought to justice. The problem is closely related to frustration with a judicial system that is inefficient and strained beyond its capacity. ¶9. (SBU) The government has responded with a police task force to investigate the killings, and the government also MANILA 00002626 003.2 OF 003 rejuvenated the Presidential Committee on Human Rights, established an Armed Forces Human Rights office to investigate allegations, and allocated additional funding for the Commission on Human Rights. The Embassy has supported all of these activities with training, assistance, and expert exchanges and is looking to broaden our support to confronting extrajudicial killings with both Philippine military and police personnel. -------------- ECONOMICS AND TRADE -------------- ¶10. (SBU) The U.S. is the Philippines' largest trading partner, with over $17 billion in two-way trade in 2007. The U.S. is also the largest investor here, with $6.6 billion in equity. After topping seven percent in 2007, Philippine Gross Domestic Product growth is expected to slow in 2008, to below five percent. The Philippine banking system is relatively sound and not heavily exposed to risks from current global financial turmoil. Nevertheless, Philippine companies already are announcing layoffs and economic pain from recession is mounting. If the global downturn is prolonged, the impact on poverty in the Philippines, where about half the population live on $2/day or less, will be very important and could have serious implications for security policy. JONES