Identifier
Created
Classification
Origin
09MANILA690
2009-03-30 09:08:00
CONFIDENTIAL
Embassy Manila
Cable title:
PHILIPPINE FINANCE SECRETARY ON GLOBAL AND LOCAL ECONOMICS
how-toP 300908Z MAR 09 FM AMEMBASSY MANILA TO SECSTATE WASHDC PRIORITY 3691 INFO ASIAN PACIFIC ECONOMIC COOPERATION PRIORITY ASEAN REGIONAL FORUM COLLECTIVE PRIORITY WORLD TRADE ORGANIZATION COLLECTIVE PRIORITY AMEMBASSY LONDON PRIORITY USMISSION GENEVA PRIORITY USMISSION USUN NEW YORK PRIORITY
C O N F I D E N T I A L MANILA 000690
E.O. 12958: DECL: 03/31/2028
ECON, EFIN, PREL, RP, WTO
SUBJECT: PHILIPPINE FINANCE SECRETARY ON GLOBAL AND LOCAL
ECONOMICS
REF: MANILA
Classified By: Ambassador Kristie A. Kenney reasons 1.4 (b)
C O N F I D E N T I A L MANILA 000690
E.O. 12958: DECL: 03/31/2028
ECON, EFIN, PREL, RP, WTO
SUBJECT: PHILIPPINE FINANCE SECRETARY ON GLOBAL AND LOCAL
ECONOMICS
REF: MANILA
Classified By: Ambassador Kristie A. Kenney reasons 1.4 (b)
1. (C) Summary: The Ambassador discussed the global and
Philippine economic situation, the Millennium Challenge
Compact, and U.S. commercial interests with the Philippine
Finance Secretary Gary Teves on March 30. The Secretary
expressed support for the U.S. approach to the upcoming Group
of 20 (G-20) Summit and guarded optimism for global economic
recovery to begin later this year. He noted that the
Philippine stimulus plan is modest (reftel) due to fiscal
concerns, but did not foresee any local crisis with
unemployment or remittances. The Secretary had a realistic
view of the Millennium Challenge Compact, and suggested that
exchanges be kept to a low, technical level to avoid raising
false hopes. He expressed appreciation for the contributions
of U.S. businesses in the Philippines and willingness to help
resolve commercial issues. End summary.
Finance Secretary Supports U.S. Approach
--------------
2. (C) In advance of the G-20 Summit, Ambassador met with
Philippine Department of Finance Secretary Margarito &Gary8
Teves over a one-on-one breakfast on March 30 for over two
hours to discuss economic issues. Secretary Teves noted the
widespread interest and anticipation of the G-20 Summit
starting later this week, and his continued close contact
with fellow ASEAN finance ministers on dealing with the
global financial crisis. He suggested that in order to
restore confidence in the global financial system, it was
critical that the G-20 meeting achieve a unified, concrete
approach towards the issues. He stressed without reservation
that the U.S. had adopted the right approach to the crisis
with its economic stimulus programs and he expressed guarded
optimism that public confidence is now returning and that
global economic recovery might begin as early as the fourth
quarter of this year.
Crisis Unlikely in Philippines
--------------
3. (C) Secretary Teves noted that the Philippines government
was able to provide only modest economic stimulus due to
concerns about its debt to GDP ratio (see reftel detailed
report on fiscal situation). He echoed the view that the
Philippines is somewhat insulated from the global crisis
because remittances from overseas Filipino workers would
still increase slightly this year and some sectors of the
economy would gain jobs to balance those lost in other
sectors. He noted that the Philippine elections scheduled
for May 2010 would put additional money into the economy and
act as an additional stimulus, that rice stocks should be
adequate to avoid price spikes this year, and that GDP growth
could still reach three percent for 2009.
Millennium Challenge Compact
--------------
4. (C) Secretary Teves indicated that he understood the
difficulty the Philippines faced in passing the corruption
indicator and that a compact was not likely to be completed
during President Arroyo,s term in office, ending in 2010.
He suggested to avoid raising public expectations for a
compact by keeping delegation exchanges to a low, technical
level. However, he indicated that he still wants to complete
preparations for an eventual compact and is looking forward
to traveling along with Budget Secretary Andaya and Ombudsman
Gutierrez to Washington in April to meet relevant U.S. MCC
officials.
5. (C) Secretary Teves expressed appreciation for the
economic and other contributions of U.S. companies invested
in the Philippines. He said he is following the Quedancor/GE
Moneybank issue and is working with legal advisors on a
solution. Ambassador took the opportunity to urge that U.S.
bidders on automated voting machinery be given full
consideration.
6. (C) Secretary Teves noted that President Arroyo has
significantly improved economic coordination among Philippine
government agencies through regular formal and informal
meetings. He also noted that serious economic problems
remain due to the inefficient tax collections and poorly
functioning judicial system. He was non-committal about his
own plans after government.
Comment
--------------
7. (C) Secretary Teves is highly regarded by the business
and banking sector and by Philippine Department of Finance
officials as a pro-reform technocrat with great ability and
integrity. Earlier this year, the Financial Times Group
designated him as Asia,s Finance Minister of the Year for
2009.
KENNEY
E.O. 12958: DECL: 03/31/2028
ECON, EFIN, PREL, RP, WTO
SUBJECT: PHILIPPINE FINANCE SECRETARY ON GLOBAL AND LOCAL
ECONOMICS
REF: MANILA
Classified By: Ambassador Kristie A. Kenney reasons 1.4 (b)
1. (C) Summary: The Ambassador discussed the global and
Philippine economic situation, the Millennium Challenge
Compact, and U.S. commercial interests with the Philippine
Finance Secretary Gary Teves on March 30. The Secretary
expressed support for the U.S. approach to the upcoming Group
of 20 (G-20) Summit and guarded optimism for global economic
recovery to begin later this year. He noted that the
Philippine stimulus plan is modest (reftel) due to fiscal
concerns, but did not foresee any local crisis with
unemployment or remittances. The Secretary had a realistic
view of the Millennium Challenge Compact, and suggested that
exchanges be kept to a low, technical level to avoid raising
false hopes. He expressed appreciation for the contributions
of U.S. businesses in the Philippines and willingness to help
resolve commercial issues. End summary.
Finance Secretary Supports U.S. Approach
--------------
2. (C) In advance of the G-20 Summit, Ambassador met with
Philippine Department of Finance Secretary Margarito &Gary8
Teves over a one-on-one breakfast on March 30 for over two
hours to discuss economic issues. Secretary Teves noted the
widespread interest and anticipation of the G-20 Summit
starting later this week, and his continued close contact
with fellow ASEAN finance ministers on dealing with the
global financial crisis. He suggested that in order to
restore confidence in the global financial system, it was
critical that the G-20 meeting achieve a unified, concrete
approach towards the issues. He stressed without reservation
that the U.S. had adopted the right approach to the crisis
with its economic stimulus programs and he expressed guarded
optimism that public confidence is now returning and that
global economic recovery might begin as early as the fourth
quarter of this year.
Crisis Unlikely in Philippines
--------------
3. (C) Secretary Teves noted that the Philippines government
was able to provide only modest economic stimulus due to
concerns about its debt to GDP ratio (see reftel detailed
report on fiscal situation). He echoed the view that the
Philippines is somewhat insulated from the global crisis
because remittances from overseas Filipino workers would
still increase slightly this year and some sectors of the
economy would gain jobs to balance those lost in other
sectors. He noted that the Philippine elections scheduled
for May 2010 would put additional money into the economy and
act as an additional stimulus, that rice stocks should be
adequate to avoid price spikes this year, and that GDP growth
could still reach three percent for 2009.
Millennium Challenge Compact
--------------
4. (C) Secretary Teves indicated that he understood the
difficulty the Philippines faced in passing the corruption
indicator and that a compact was not likely to be completed
during President Arroyo,s term in office, ending in 2010.
He suggested to avoid raising public expectations for a
compact by keeping delegation exchanges to a low, technical
level. However, he indicated that he still wants to complete
preparations for an eventual compact and is looking forward
to traveling along with Budget Secretary Andaya and Ombudsman
Gutierrez to Washington in April to meet relevant U.S. MCC
officials.
5. (C) Secretary Teves expressed appreciation for the
economic and other contributions of U.S. companies invested
in the Philippines. He said he is following the Quedancor/GE
Moneybank issue and is working with legal advisors on a
solution. Ambassador took the opportunity to urge that U.S.
bidders on automated voting machinery be given full
consideration.
6. (C) Secretary Teves noted that President Arroyo has
significantly improved economic coordination among Philippine
government agencies through regular formal and informal
meetings. He also noted that serious economic problems
remain due to the inefficient tax collections and poorly
functioning judicial system. He was non-committal about his
own plans after government.
Comment
--------------
7. (C) Secretary Teves is highly regarded by the business
and banking sector and by Philippine Department of Finance
officials as a pro-reform technocrat with great ability and
integrity. Earlier this year, the Financial Times Group
designated him as Asia,s Finance Minister of the Year for
2009.
KENNEY