SCENESETTER FOR THE VISIT OF CODEL FILNER

UNCLAS SECTION 01 OF 03 MANILA 002400 SIPDIS E.O. 12958: N/A TAGS: PREL OREP OVIP VA RP SUBJECT: SCENESETTER FOR THE VISIT OF CODEL FILNER ¶1. Chairman Filner, welcome again to the Philippines. Your visit comes during an exciting time in the Philippines, as the official campaign for the May 2010 nationwide elections kicks off at the end of November. The United States and the Philippines have a longstanding and deep relationship based on nearly 50 years of direct American administration, a Philippine government modeled on the U.S. government, broad economic ties, and an extensive interchange of people. The more than four million Filipino-Americans now constitute the largest Asian ethnicity in the United States, while some 250,000 U.S. citizens reside in the Philippines. The memory of our partnership in World War II still resonates here, and the recent passage of the Filipino Veterans Equity Compensation provision has served to further bolster the unique bond shared between U.S. and Philippine veterans. U.S. interests in this major non-NATO ally center on strengthening democracy, fostering economic growth, fighting terrorism and other threats to security, and providing superb services to our American and Filipino publics. The U.S. is the largest assistance grant donor to the Philippines, its largest trading partner, and the largest investor. ¶2. Your visit will include calls on senior Philippine officials, a visit with a joint U.S.-Philippine military task force in the southern Philippines, a tour of the VA Manila facilities, and several opportunities to visit historical sites in and around Manila. Our entire team looks forward to making your visit productive and useful to you. BACKGROUND -------------- ¶3. The Philippines, with almost 90 million people, has one of the fastest growing populations in Asia. Metro Manila, home to at least 12 million people, is the largest city in a country of over 7,000 islands. Literacy (94%) remains high, although the standard of public education and other government services has declined in recent decades. Filipinos are mainly Roman Catholic (83%) or otherwise Christian (10%) with a small Muslim minority (6%) based in Mindanao, where you will travel. Over 40 percent of Filipinos earn less than $2 per day, with a much higher percentage of Muslims eking out a living below this threshold. VETERANS ISSUES -------------- ¶4. The U.S. Department of Veterans Affairs Manila Regional Office and Outpatient Clinic are the VA's only full-service facilities located in a foreign country. VA provides monetary benefits to approximately 15,000 veterans and dependents residing in the Philippines, and provides health care to approximately 4,300 veterans residing here. The VA operation in Manila has a sizeable economic impact here, worth about $293.5 million in FY 2009. VA also administers a medical equipment grant program to support the Philippine Government's Veterans Memorial Medical Center (VMMC). To date over $5.5 million worth of medical equipment and facility upgrades have been donated to the VMMC. Due to the low standard of living in the Philippines and the cultural preference to conduct business through middlemen, claims fraud remains a significant challenge. While we have success in identifying fraud, obtaining prosecutions through the Philippine justice system is difficult. ¶5. The VA Manila office has sole jurisdiction over the administration of the Filipino Veterans Equity Compensation (FVEC) benefit, passed as part of the American Recovery and Reinvestment Act of 2009 (ARRA). Since its passage, VA Manila has had great success in providing timely benefits to eligible veterans. To date, VA Manila has found over 10,000 Veterans or their widows eligible, and disbursed over $120 million of the allocated $198 million for this program. Filipino veterans and their dependents in receipt of VA benefits enjoy a far greater standard of living here than their ineligible counterparts, many of whom receive benefits from the chronically in-debt Philippine Veterans Affairs Office at the rate of approximately $100 per month. SOCIAL SECURITY ADMINISTRATION -------------- ¶6. The Social Security Administration Division in Manila serves as the hub for Social Security work for all the Embassies and Consulates in the East Asia Pacific Region. The division currently serves 41,000 beneficiaries and pays out over $25 million each month. In the Philippines alone, there are almost 20,000 beneficiaries. CONSULAR -------------- ¶7. The Consular Section provides services (reports of birth, passports, notarial and emergency support) to the approximately 130,000 Americans living in the Philippines as well as the roughly 120,000 Americans who visit the Philippines at any given time. The Consular Section issues about 60,000 immigrant visas a year, including visas to large numbers of nurses, teachers, and physical MANILA 00002400 002 OF 003 therapists. The Consular Section sees almost 200,000 nonimmigrant visa applicants annually, including large numbers of merchant marine mariners and temporary seasonal workers. PHILIPPINE POLITICS -------------- ¶8. Philippine political life is free-wheeling, centered primarily on the personal charisma of individual political leaders, with most wealth and political power limited to a few influential families. President Gloria Macapagal Arroyo assumed the Presidency in 2001 after a "people power" movement swept her predecessor out of office. She was elected in her own right in controversial voting in May ¶2004. With less than a year left in office, President Arroyo continues to balance competing political interests amidst economic challenges. President Arroyo has weathered numerous unsuccessful impeachment efforts and low-level military coup attempts. With national elections scheduled for May 2010, nearly 20 cabinet members have announced their intention to seek elected office of some sort. Candidates for President, Congress, and Mayors positions must file their candidacies by November 30. You will arrive amid intense jockeying for position as candidates start to file. PROMOTING HUMAN RIGHTS -------------- ¶9. President Arroyo continues to express her 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, but the Philippine government acknowledges the need to do more to ensure that all such crimes 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 continues to conduct a comprehensive plan of public outreach activities, training, and institution building to make further progress in addressing the problem. ECONOMICS and TRADE -------------- ¶10. The U.S. remains the Philippines largest trading partner, with over $18 billion in two-way merchandise trade in 2008. Major U.S. exports include electronics and agricultural products. The U.S. is also the largest investor here, with over $6 billion in assets. The large American Chamber of Commerce in Manila is proud of its history as the first American Chamber of Commerce abroad. ¶11. The Philippines has largely avoided the effects of the worldwide recession, and the economy is projected to grow between one and two percent in 2009. Low levels of government infrastructure investment and public spending on health and education present serious challenges to poverty alleviation. However, a resilient service sector (particularly a booming business process outsourcing industry) and strong overseas workers' remittances (expected to increase to more than $17 billion in 2009, more than 10% of Philippine GNP) have helped the Philippines through this period of global economic slowdown. The United States assists in economic development, anti-corruption, environmental protection, and poverty alleviation programs through our USAID programs, U.S. Department of Agriculture programs, and through the efforts of an active Peace Corps program. SECURITY and TERRORISM -------------- ¶12. The U.S. has designated four extremist groups as Foreign Terrorist Organizations -- Jemaah Islamiyah, the Abu Sayyaf Group, the Rajah Solaiman movement and the New People's Army. The first two groups currently pose the most direct threats to U.S. interests and are located in the poor, predominately Muslim south. The New People's Army operates throughout the country. We work closely on developing the capacity of the Armed Forces of the Philippines and the police to combat terrorists. We provide training and equipment, engage in a robust program of joint military exercises, and are currently undertaking a joint, far-reaching program to reform the Armed Forces of the Philippines into a modern, effective force. The Philippines and the United States 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. Our Rewards for Justice Program provides incentives to identify and arrest terrorists. About 60% of USAID's annual development assistance is channeled to conflict-affected areas of Mindanao to build infrastructure and carry out health, renewable energy, environment, education, and livelihood programs. These programs attack the conditions of poverty that provide a breeding ground 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. MANILA 00002400 003 OF 003 PEACE PROCESS -------------- ¶13. In recent weeks, the Philippine government and members of the separatist Moro Islamic Liberation Front (MILF) have established a new ceasefire and taken steps toward restarting formal peace talks, demonstrating that both sides share a mutually reinforcing commitment to peace. This ceasefire ended a year of fighting that followed a Philippine Supreme Court Decision in August 2008 that a key peace deal with the MILF was unconstitutional. The two sides have pledged to work toward a new framework for engagement and to aid the return of internally displaced persons affected by the conflict. U.S. support through development assistance will be an important component of a successful peace process. KENNEY