SCENESETTER FOR THE VISIT OF DEFENSE SECRETARY

C O N F I D E N T I A L SECTION 01 OF 04 MANILA 001107 SIPDIS STATE FOR EAP/MTS E.O. 12958: DECL: 05/19/2019 TAGS: MARR MPOS PINS PREL RP SUBJECT: SCENESETTER FOR THE VISIT OF DEFENSE SECRETARY GATES TO MANILA Classified By: Ambassador Kristie A. Kenney, reasons 1.4 (b) and (d) ¶1. (C) SUMMARY: Secretary Gates, we appreciate your engagement with Philippine officials at Shangri-La and your visit to the Philippines. The Philippines has undergone many positive changes since the last visit of a U.S. Secretary of Defense in September 2000; many as a result of sustained U.S. assistance using coordinated hard and soft power approaches. Our strong bilateral relationship has been tested in court challenges to the Visiting Forces Agreement, but remains very close. The Philippine Armed Forces have scored significant successes against terrorists in the southern Philippines and against the communist New People's Army. Increased security has allowed USAID and other USG agencies to implement development projects in areas prone to terrorist recruitment. While efforts towards a peace agreement between the Philippine government and Muslim insurgents have stalled, the military continues to press the fight against rogue elements of the insurgency. Lieutenant General Victor Ibrado recently became Chief of Staff of the Philippine Armed Forces and is expected to maintain the momentum against terrorist and insurgent groups. Philippine Defense Secretary Gilberto Teodoro, a likely candidate for president next year, has been a strong leader and possesses a clear vision for the future of the Philippine military. You will have an opportunity to discuss key strategic issues -- such as our shared counterterrorism fight -- with Secretary Teodoro and meet U.S. military personnel serving in the field alongside their Philippine counterparts. END SUMMARY. -------------- PHILIPPINE POLITICS -------------- ¶2. (C) With a year left in office, President Gloria Macapagal Arroyo continues to balance competing political interests amidst economic challenges. A forceful politician who has faced a series of challenges to her rule, including unsuccessful impeachment efforts and low-level military coup attempts, President Arroyo's administration has been plagued by allegations of corruption. As her term ends in 2010, her Vice President and several senators have already announced their intent to run for the presidency. President Arroyo's relationship with top security officials remains strong, and military and police have kept out of political debates and remained focused on their roles. -------------- PHILIPPINES ECONOMIC GROWTH SLOWS -------------- ¶3. (U) The Philippine economy has averaged better than five percent growth for the past eight years, but GDP growth may slow to about half that in 2009 under the impact of the global financial crisis. In recent months, many Philippine businesses as well as several U.S. companies announced plant closures and layoffs, signaling that the economic pain from the world-wide economic slowdown is widening. Should the global economic downturn be prolonged, the impact on poverty in the Philippines, where more than 40 percent of the population lives on less than two dollars per day, could have a visible impact on domestic politics. On the positive side, the Philippine banking system is relatively sound and not heavily exposed to risks from current global financial turmoil. The U.S. remains the Philippines' largest trading partner, with over $16 billion in two-way trade during 2008 and is one of the largest investors, with $6.7 billion in equity. -------------- PHILIPPINE SECRETARY OF DEFENSE TEODORO -------------- ¶4. (C) On the government's fight against the communist and Muslim insurgencies, Teodoro is a hawk. Teodoro sees ongoing violence in central Mindanao as clan thuggery, and he believes there can be no peace in the southern Philippines without disarmament and has stressed that point with U.S. officials. Teodoro has said he thinks more Philippine troops in Mindanao are necessary in the near term to establish a solid security environment. He has echoed the Arroyo administration's concern with the "safe haven" designation of areas in the southern Philippines, as described in the 2008 U.S. Country Report on Terrorism, and is eager to explain to MANILA 00001107 002 OF 004 you why he believes it is incorrect. Teodoro said the government will issue evaluations of the government's efforts against the New Peoples' Army, the ASG, and rogue MILF groups by the end of this year. ¶5. (C) Secretary Teodoro has stressed that the U.S.-Philippine Mutual Defense Treaty, which has been in place since 1953, is vital in reinforcing the history shared between our two countries and for providing a mechanism for future engagement. Teodoro believes that the next phase of the U.S.-Philippine military relationship should go beyond combat training and focus on broader strategic objectives. He was very pleased with joint Philippine-U.S. cooperation in co-sponsoring the first-ever field exercise for the ASEAN Regional Forum, a demonstration of disaster relief response held in the Philippines last month that involved 25 countries. He has championed the successes of Philippine Defense Reform with sustained U.S. assistance, and said that with the program set to conclude in 2010, he wants to complete two additional components in the next year: a study of Philippine counterinsurgency doctrine based on current practices; and a review of information and psychological operations to determine the most effective way to build support for government efforts. -------------- STRONG BILATERAL DEFENSE RELATIONSHIP CONTINUES -------------- -- ¶6. (C) With a new administration in Washington and Philippine presidential elections set for May 2010, senior Philippine defense officials believe now is the time to showcase the depth of the U.S.- Philippine relationship in a variety of areas, including counterterrorism operations, disaster relief, and multilateral engagement. As such, these officials have emphasized that continued U.S. military assistance is essential and that expanded programs could provide greater improvements in areas ranging from regional security to human rights. Despite court challenges to the Visiting Forces Agreement (VFA) and opposition from leftists to U.S. military presence, the Philippine Supreme Court ruled in February that the VFA is constitutional, and the Arroyo administration continues to voice strong support for our military partnership. ¶7. (C) We have a robust military presence in the Philippines -- a joint U.S. Military Assistance Group (JUSMAG),Defense Attache Office, and approximately 550 Joint Special Operations Task Force-Philippines (JSOTF-P) personnel. Such depth allows us to have a broad and far-reaching impact on the Philippine military. U.S. military leadership is integrated into the Country Team and provides input that shapes decisions and policy. Apart from JUSMAG's traditional role of training and military sales, we have focused on assisting the Armed Forces of the Philippines (AFP) with revising their doctrine to promote ethics and human rights. The Philippines is an active provider of peacekeeping troops around the world, contributing to eight United Nations operations, and last year they became members of the Global Peace Operations Initiative. This year, three Philippine nominees were accepted to U.S. service academies, one at each institution. Members of JSOTF-P work side-by-side with Philippine troops in Mindanao and the Sulu Archipelago, advising and assisting them in counterterrorism operations. At the same time, our military closely cooperates with U.S. law enforcement and intelligence agencies to achieve important successes in counterterrorism efforts. ¶8. (C) Several large-scale bilateral exercises are conducted each year between U.S. and Philippine troops, along with dozens of other training activities and exchanges. Humanitarian projects associated with the exercises have been welcomed by the Philippine government and population. More than 28,000 people received medical and dental care as part of the civil-military component of the Balikatan exercise that concluded at the end of April. Thousands more receive assistance each year through projects that JSOTF-P conducts in the southern Philippines with their AFP counterparts and through the more than 130 visits by U.S. ships. -------------- SUCCESSFUL COUNTERTERRORISM EFFORTS -------------- MANILA 00001107 003 OF 004 ¶9. (C) The United States and the Philippines have scored important successes on the security cooperation and counterterrorism fronts. This alliance has resulted in the death or capture of a dozen key terrorist leaders and over 250 other terrorism suspects in the last three years. Secretary Teodoro recently emphasized that the Philippine government's success against key high-value individuals of the Abu Sayyaf Group (ASG) and Jemaah Islamiyah (JI) terrorist organizations was achieved despite persistent shortfalls in logistical assets, and he values the contributions of U.S. military personnel in improving combat capability of Philippine forces. While the overall security situation in the southern Philippines has improved significantly over the past three years, partly as a result of U.S. military assistance, the brazen January kidnapping on Jolo island by the ASG of three members of the International Committee of the Red Cross, one of whom remains a hostage, highlights the continuing challenges that face the Philippine military and police in securing these volatile areas. -------------- PEACE PROCESS -------------- ¶10. (C) Although peace talks with separatist Moro Islamic Liberation Front (MILF) insurgents have remained stalled since fighting broke out in August 2008, there is still a possibility the government will make a push to reach a settlement in President Arroyo's last year -- a promise that the government has pledged to keep. Groundwork already proceeding includes a reconstituted government peace panel, a newly-appointed chief negotiator, grass roots consultations with communities across Minadano to address the public's concerns, back-channel communications with Muslim rebels, and overtures to Malaysia and other nations to play an active role as mediators in facilitating renewed talks. A firmly re-established cease-fire and renewed peace talks would create a more positive atmosphere for talks and allow tens of thousands of displaced people to return home. Earlier this year, President Arroyo publicly stated that 2009 would be a "comeback year for peace" and that she would emphasize to all stakeholders that a robust peace process between the Philippine government and the MILF would encourage stability in the region and enhance economic development. -------------- PROMOTING HUMAN RIGHTS -------------- ¶11. (C) President Arroyo continues to express her unwavering commitment to making greater progress on the long-standing problem of extrajudicial killings, and has taken concrete steps in this direction. Partly due to increased attention by the Philippine government, the number of extrajudicial killings decreased dramatically through 2007 and 2008. While many execution-style slayings among politicians and others are likely a result of local disputes and long-standing feuds among rival clans, the government acknowledges the need to do more to ensure that all such crimes -- whether or not linked to security forces -- are fully investigated, and that those responsible are brought to justice. The Embassy continues to press the issue at the highest levels of the Philippine government, and has implemented a comprehensive plan of public outreach activities, training, and institution-building to make further progress in addressing the problem. -------------- USAID'S ROLE -------------- ¶12. (C) 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 USAID resources for the Philippines have been committed to these areas, complemented by 1207 funds, JSOTF-P activities (since 2002),and humanitarian missions such as the USNS Mercy. USAID-sponsored activities in these areas include infrastructure development, school computerization, health and education improvement, environmental management, former combatant reintegration, and governance. USAID financed the MANILA 00001107 004 OF 004 construction of more than 800 community-level and over 40 regional-impact infrastructure projects throughout the conflict-affected communities of the southern Philippines. The primary objective has been to encourage economic growth and demonstrate sustained commitment by the Philippine and U.S. governments to establishing security. KENNEY