SCENESETTER FOR ADMIRAL BIRD'S VISIT TO THE

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 000329

SIPDIS

STATE FOR EAP/MTS

E.O. 12958: DECL: 02/13/2019
TAGS: MARR MPOS PINS PREL RP
SUBJECT: SCENESETTER FOR ADMIRAL BIRD'S VISIT TO THE
PHILIPPINES

MANILA 00000329 001.2 OF 003


Classified By: Acting Deputy Chief of Mission Larry L. Memmott;
for reasons 1.4 (b) and (d)


1. (C) SUMMARY: Admiral Bird, welcome back to the
Philippines! Our recent meetings with senior Philippine
officials have underscored that our bilateral security
relationship is robust and that the Philippines is a valued
strategic partner, but we are keenly aware of the sensitivity
surrounding U.S. military presence in the Philippines. On
February 11, the Philippine Supreme Court ruled that the
Visiting Forces Agreement was constitutional, but also
decided that U.S. Marine Lance Corporal Daniel Smith should
be in Philippine custody, pending discussions between our two
governments. We publicly have reaffirmed the professionalism
of our military personnel, and during your visit, the
heightened political and media environment surrounding the
court decision will require close coordination on public
events, community relations activities, and liberty.
Successes continue on key security cooperation and
counterterrorism issues along with the government's pledge to
re-start the stalled peace process talks with the Moro
Islamic Liberation Front soon. With less than 16 months left
in her term, President Arroyo is battling a potentially
worsening economy and competing political interests.
President Arroyo continues to express her commitment to human
rights and assures us the government will continue its
efforts to reduce the number of extrajudicial killings in

2009. During your visit you will be briefed by the Mission
Country Team and will meet with Philippine Armed Forces Chief
of Staff General Alexander Yano, Philippine Navy commander
Vice Admiral Ferdinand Golez, and Undersecretary for Legal
Affairs Alberto Valenzuela, and participate in outreach
activities for the USS Blue Ridge visit. END SUMMARY.

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SUPREME COURT RULES VFA CONSTITUTIONAL
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2. (C) The Philippine Supreme Court ruled February 11 that
the Visiting Forces Agreement (VFA),which governs the
presence of U.S. military personnel in the Philippines, is
constitutional. However, it also ruled that U.S. Marine
Lance Corporal Daniel J. Smith, who has been in custody on
Embassy grounds since his December 2006 conviction for rape,
should be transferred to Philippine custody. The Mission is
intensively engaging senior levels of the Philippine
government on the court decision and LCPL Smith will remain
in USG custody until a mutually acceptable resolution is
reached. We publicly have emphasized that the U.S. military
holds itself to the highest standards of conduct, but the
sensitive media and political atmosphere generated by the
Supreme Court's decision will require that we closely
cooperate on all activities during the USS Blue Ridge visit,
including public appearances and liberty. Press guidance is
attached in paragraphs 12-13.

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SUCCESSFUL COUNTERTERRORISM EFFORTS
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3. (C) The United States and the Philippines have scored
important successes on the security cooperation and
counterterrorism fronts over the last several years, and the
Philippines continues to be a valued strategic partner.
Secretary of National Defense Gilberto 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 were achieved
despite persistent shortfalls in logistical assets, and he
values the contributions of U.S. military personnel to the
improved combat capability of Philippine forces. While the
overall security situation in the southern Philippines has
improved significantly over the past two years as a result
U.S. military assistance, the brazen January kidnappings on
Jolo island of three members of the International Committee
of the Red Cross, who remain in terrorist captivity,
highlights the continuing challenges that face the Philippine
military and police in securing these volatile areas.


4. (C) As a result of continued joint training with their
U.S. counterparts, the Philippine military has disrupted
terrorist networks in Mindanao and destroyed numerous known
terrorist camps in the Sulu Archipelago. Since November
2008, combined military and police efforts in Mindanao,
supported by U.S. personnel, led to the capture of senior JI
facilitators Hajiruddin Dansalan in November 2008, and Omar

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Venancio and Makasid Dilna in January 2009. Separately, on
December 7, 2008, the Philippine military conducted nearly
simultaneous offensives against high-value ASG members on
Jolo island and an ASG group involved in numerous kidnappings
on Basilan island.

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STRONG BILATERAL DEFENSE RELATIONSHIP CONTINUES
-------------- --


5. (C) With a new administration in Washington and
presidential elections for the Philippines 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.


6. (C) Recently, Secretary Teodoro also stressed that the
U.S.-Philippine Mutual Defense Treaty, which has been in
place since 1953, could not be underestimated for its
importance in reinforcing the history shared between our two
countries and for providing a mechanism for future
engagement. Teodoro has championed the successes of
Philippine Defense Reform (PDR) with sustained U.S.
assistance, and said that with the PDR set to conclude with
the end of his tenure in 2010, he wants to complete two
additional components in the next 15 months: 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. Philippine defense officials
generally believe that the next phase of the U.S.-Philippine
military relationship should go beyond combat training and
focus on broader strategic objectives.


7. (C) From increased ship visits to robust bilateral
exercises to a national focus on civil-military and
humanitarian activities, the Philippine government welcomes
U.S. military engagement and is working to streamline
administrative processes so bilateral activities proceed
smoothly, particularly with regard to ship and aircraft
clearances. Along with over 800 aircraft clearances, the
Philippine government approved 130 ship visits in 2008 -- up
from 81 in 2007. The overwhelming positive impact of these
ship visits on the local communities, not only in economic
terms, but more importantly in the associated community
relations activities conducted while in port, garner enormous
goodwill among the local populace.

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GOVERNMENT PLEDGES TO RESTART STALLED PEACE PROCESS
-------------- --------------


8. (C) Although peace talks with separatist Moro Islamic
Liberation Front (MILF) insurgents have remained stalled
since fighting broke out in August 2008, prospects point
towards a possible resumption of negotiations this spring --
a promise that the government has pledged to keep.
Groundwork already proceeding includes a reconstituted
government peace panel, a newly-appointed chief negotiator,
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.

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PHILIPPINE POLITICS
--------------


9. (C) With 16 months 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

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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. While her
administration has publicly pledged to reinvigorate the
stalled Mindanao peace process, it is also widely believed
that she will soon begin to actively lend support to her
choice to succeed her as president.

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PHILIPPINES ECONOMIC GROWTH SLOWS
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10. (U) In 2007, the Philippine economy grew by seven
percent, but growth slowed to five percent in 2008. However,
in recent months, many Philippine businesses as well as
several U.S. companies announced plant closures and large
scale 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 almost half the population lives on less
than USD 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
$17 billion in two-way trade during 2007 and the largest
investor, with $6.6 billion in equity.

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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.

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PRESS GUIDANCE FOR SMITH CASE
--------------


12. (U) In response to numerous media queries, the Embassy
issued a brief statement February 11 as follows:

Philippine Supreme Court Decision on Visiting Forces Agreement

-- The U.S. Embassy has taken note of the Supreme Court
decision regarding the Visiting Forces Agreement (VFA). As
it concerns important legal issues, we have referred it to
United States legal experts in Washington.


13. (U) The following if-asked guidance was also prepared:

-- The Visiting Forces Agreement (VFA) has provided the sole
framework for U.S.-Philippine cooperation on legal cases
involving visiting U.S. military personnel.

If asked about whereabouts of Daniel Smith:

-- Daniel Smith remains in confinement on the grounds of the
main U.S. Embassy compound.

KENNEY