Cablegate: Uss Blue Ridge Visit Catalyst for Embassy Outreach to The

DE RUEHML #0561/01 0510925
O 200925Z FEB 07





E.O. 12958: N/A

1. SUMMARY: The February 11th-14th visit of the USS Blue Ridge to
Cebu provided an opportunity for a coordinated, Mission-wide
outreach to the Philippine's second largest metro area. Cebu's
importance extends beyond its "second city" status, as its central
location in the Philippine archipelago makes it a hub for transport,
media, and business for much of the central and south Philippines.
Cebu, once home to a US Consulate, maintains a strong USG profile
through the Mission's only Consular Agent. The local and national
media took note as Ambassador interacted not only with Cebu's
political, business, and civil society leaders, but also with the
ordinary people of Cebu in a range of venues. Representatives of
several Mission sections used the attention generated by the USS
Blue Ridge visit to spotlight long-standing Mission programs and
contacts throughout Cebu. END SUMMARY.

---------------------- --------------------- ---------

2. The Ambassador began her outreach in Cebu on February 11th by
hosting a dinner for political, business, media, and cultural
figures, including Gwendolyn Garcia, governor of Cebu Province.
Commander of the 7th Fleet VADM Douglas Crowder and senior officers
from the USS Blue Ridge attended so that they could directly
interact with important Cebuanos. Echoing the Mission's
multi-pronged strategy for its Cebu outreach, officers from the
Political, Economic, JUSMAG, Public Affairs, and Cebu Consular
Office were also present to advance U.S. interests. The dinner,
marked by a lively atmosphere, provided an informal forum for the
Mission and 7th Fleet to stress the positive aspects of the
US-Philippine relations that underpinned the visit of the USS Blue

3. The dinner acted as a prelude to a reception for several hundred
people from Cebu and the surrounding area co-hosted by the
Ambassador and VADM Crowder aboard the USS Blue Ridge on the evening
of February 12th. Once again the benefits of the strong
US-Philippine relationship were the focus of brief remarks by
Ambassador and VADM Crowder: Governor Garcia enthused on the ties
between Cebu and the United States, and thanked the United States
for its contributions to the Philippines. The beautiful setting
aboard the ship in Cebu harbor allowed Mission officers (including
DCM) and 7th Fleet crewmembers to interact with Cebu's leaders and
media, ordinary Cebuanos, including school children and teachers,
officers and enlisted men of the Philippine armed forces, police,
business and society figures, as well as American residents of Cebu.
The attendees were clearly thrilled to be aboard ship and the
reception garnered extensive positive coverage in all the local
newspapers, as well as some national media.

------------- ----------------

4. The crew of the USS Blue Ridge undertook several community
relation events (COMRELs) while in Cebu. The Ambassador attended two
COMRELs with VADM Crowder. The first was a visit to a local High
School on the morning of February 12th. The USS Blue Ridge crew and
Ambassador were warmly greeted as they donated educational and
athletic equipment and actually participated in repairs and
renovation of the dilapidated school. Governor Garcia was present
and thanked the US for its valued assistance.

5. The other COMREL attended by the Ambassador was a trip to a
Medical Civil Action Program (MEDCAP). This MEDCAP was a joint
effort of the USS BLUE RIDGE, JUSMAG, USAID, Philippine military and
the City Health Office, and included a team composed of 55 Filipino
and American doctors, dentists, nurses, technicians and dental
assistants, and some local health workers. The U.S. Navy provided 3
doctors, 1 dentist, food for the team and some drugs and vitamins.
The City Health Office and Philippine military provided 27 doctors
and dentists, 24 nurses, technicians and dental assistants, allowed
the use of its dental van, equipment, and supplies. The
Municipality of Mambaling contributed the services of their health
workers and organized the physical arrangements for the MEDCAP. As
a result of this collaboration, 671 patients received medical
services and 102 patients were provided with dental services. Both
COMRELs attracted TV and print media, and Ambassador and VADM
Crowder gave impromptu interviews.

6. Another popular and well-covered outreach program attended by the
Ambassador and VADM Crowder was a free concert given by the 7th
Fleet Band at a local shopping mall. The band drew huge audience
energized by a variety of musical styles, from rock to brass band
music. The concert featured participation from a Philippine
military band, as well.

-------------------- ------------------- ---------------

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7. The Ambassador attended the dedication of a Marine Protected Area
(MPA) off of the coast of Mactan Island. USAID helped fund and
develop the MPA, which is a first of its kind in the Philippines,
where a local government by virtue of an ordinance enjoins partners
from the coastal communities, nongovernmental organizations and the
private sector to become stewards in co-managing marine sanctuaries
for the purpose of conserving biodiversity and sustainably managing
coastal-marine resources for food security and ecotourism

8. The Ambassador hosted a lunch for key figures from several
environmentalist NGOs, including the president of the World Wildlife
Fund Philippines. Environmental groups are among the most active
participants in Cebu's civil society. Participants praised USAID's
efforts, while noting there is much to be done. The Mission's
Consular agent in Cebu stressed the first steps already taken in
business stewardship of the environment, and others talked of the
impressive results of outreach to youth. Other leaders described
the need to educate local officials in order to reduce the gap
between the letter of the laws that preserve the environment and the
reality of lax enforcement by officials, stemming largely from
ignorance of the laws. Additionally, because the Philippine Navy
enforces the laws protecting the Philippine coastlines, discussion
focused on inviting the US Coast Guard and/or other US military to
help in educating their Philippine counterparts on ways to fulfill
their environmental responsibilities.

------------------------- ------------------------- ---------

9. Ambassador and VADM Crowder visited the University of San Carlos,
the oldest university in the Philippines, which in the past has
hosted a variety of USG funded speakers and scholars. The
Ambassador held a round-table discussion with students from several
departments, particularly political science, economics, and
management. VADM Crowder and the Ambassador delivered remarks after
which students and faculty spent almost an hour asking various
questions. While some questions focused on the sensitive issue of
the Visiting Forces Agreement, others addressed broader issues such
as the US policy on climate change, globalization, and the upcoming
Presidential elections in the US. The tone throughout was informal
and friendly, although pointed at times.

10. Ambassador also visited the Cebu International School, whose
student body is 20% American, and which services many of the
children of the international businesses investing in Cebu. The
State Department has funded $68,000 in Soft Target Security
Initiative (STSI) monies to the Cebu International School, with
close coordination from RSO Manila. The Ambassador toured the
school and met with a group of students. Questions elicited the
Ambassador's opinion on topical issues, including more questions
about US policy on climate change and the upcoming US elections.

11. The Ambassador paid a very cordial courtesy call to Ricardo
Cardinal Vidal, Archbishop of Cebu and one of three Filipino members
of the College of Cardinals. Cardinal Vidal thanked the Ambassador
for continual U.S. support for democracy in the Philippines,
particularly during President Marcos's ouster, in which he played a
significant role. He expressed concern over an initiative to break
up Cebu into four provinces but added that he was prepared to make
the necessary adjustments in his archdiocese should the break-up
occur. Cardinal Vidal, who recently turned 76, indicated he had
reached retirement age (75) and was merely waiting for the Pope to
find a replacement so he could retire.

--------------- ------------------------- ---------

12. Over 100 American businesses operate in Cebu, including Timex,
Lear Corporation, Lexmark International, and Fairchild
Semiconductors. Lexmark has both a production facility and a
research and development (R&D) facility in Cebu, and the Ambassador
visited the R&D facility. The Lexmark R&D facility has over 500
employees now, and plans to expand to over 1100 once they finish
building their new facilities. Like most other US businesses
operating in Cebu, almost all of the employees are Filipinos.
Lexmark is a business specializing in computer printers, and was
originally a branch of IBM before splitting off in 1991. It first
started operations in Cebu in 1999, and which is now one of their
three major international locations.

13. Lexmark R&D's President outlined several of the factors that
make Cebu an attractive venue for US businesses, such as:

- Cebu's international airport makes it a centrally located hub
within Asia.
- A strong tradition of English-language fluency among the
population, particularly among the large pool of well-educated

MANILA 00000561 003 OF 004

graduates of local universities and technical schools.
- Operating costs are 30% less than Manila, and quality of life is
better than in Manila due to less pollution, traffic, and
- Tax incentives in the Cebu Economic Zone

14. A tour of the facility showed that Filipino engineers are on the
forefront of high-tech research and development and design of new
printer and computer technologies. Lexmark also noted with pride
its role as a good corporate citizen--an emerging concept in the
Philippines. Lexmark employees have "adopted" a local school,
setting benchmarks to measure the impact of the volunteer hours and
money donated by Lexmark's employees.

---------------- ------------------- ---------

15. Ambassador did exclusive interviews with GMA TV and ABS-CBN TV,
the two largest national networks in the country, plus several
stand-up interviews on the margins of various events. A story on
the Cebu stop of the Blue Ridge appeared in Manila on ABS-CBN as
well. The Ambassador also talked to a local cable channel during
the reception aboard the USS Blue Ridge. There was extensive
coverage of the Blue Ridge reception, all the Blue Ridge events, and
the Ambassador's visit by local newspapers the Cebu Freeman, SunStar
Cebu, and Cebu Daily News. Photographs and articles appeared in
several Manila-based national newspapers as well through their
Cebu-based stringers outlining the success of the USS Blue Ridge

----------------- ------------------------- -----------------

16. At several events key mission members from the Political,
Economic and Public Affairs sections, as well as representatives
from USAID, JUSMAG, and FCS joined Ambassador Kenney. However,
representatives of these and other sections also took advantage of
the spotlight on US-RP relations generated by the visit of the USS
Blue Ridge in order to participate in many events.

17. PAS officers:

- Arranged for GMA TV and ABS-CBN TV to visit the Blue Ridge for
exclusive tours and interviews with relevant personnel,
- for 7th Fleet Band to do a live interview on DY101 FM radio to
plug their free public concert, and
- a group tour of the USS Blue Ridge for the media.

PAS officers also visited American Corners in various locations in

18. (SBU) Poloffs used the Blue Ridge visit to Cebu as an
opportunity to meet with various prominent government and civic
figures, including Governor Garcia, Congressmen Raul del Mar and
Antonio Cuenco, and Cardinal Vidal, to discuss the midterm elections
scheduled for May 14. Most major politicians, running unopposed or
lacking serious opponents, expressed little concern about the
upcoming elections. Governor Gwendolyn Garcia, who currently has no
opponent, said the most significant problem facing the province was
the campaign by some local congressmen to split up Cebu into four
provinces. She is actively campaigning for "one, indivisible,
Cebu." Most officials thought the provincial breakup had not been
sufficiently discussed and would result in four costly, yet
inefficient, bureaucracies. Though proponents claim that the
current provincial government ignores rural communities, some
interlocutors asserted the initiative is driven by several
congressmen on their third -- and last - term. According to this
view, these congressmen, popular in their districts, yet legally
barred from a fourth consecutive term, seek to create three new
governorships they believe they can easily attain. Measures to
create new provinces must be initially approved by Congress and
ratified by referendum. Local officials, such as mayors,
vice-mayors, and provincial legislators, expressed little interest
in "Manila" politics. They were almost unanimous in their belief
that the makeup of the Senate would have a negligible effect on
their communities. Instead, they were concerned with attracting
foreign investment to their communities, increasing hotel capacity
to attract more tourists, and gaining the support of neighborhood
leaders for social initiatives, such as drug awareness campaigns.

19. ECON and Commercial Counselors met with representatives of the
Cebu Chamber of Commerce and Industry (CCCI) who discussed the
strengths of the local economy, with a particular focus on the
emergence of a vibrant IT/Call Center sector, and prospects for
development of the tourism sector. When asked what, if anything,
constrained growth in Cebu, interlocutors all cited interference
from Metro Manila as their chief problem. They also called on a film

MANILA 00000561 004.2 OF 004

production studio in Cebu run by American executives, a Lear
Corporation plant manufacturing in Cebu's industrial zone, and
Fairchild Semiconductor, which produces high-end energy-management
chips. These businesses echoed Lexmark in citing the international
airport, desirable location, talented local personnel, and low costs
as factors for locating in Cebu1.

20. USAID Mission Director and staff visited Celestica Philippines,
Inc. at the Mactan Export Processing Zone 1. This firm is a
recipient of USAID assistance to establish and strengthen a
workplace health program that includes the provision of family
planning and maternal and child health services. Celestica
Philippines, Inc. employs around 1,200 who are benefiting from the
workplace health program.

21. The Agricultural Counselor visited the flour milling plant of
General Milling Corporation (GMC) in Cebu province. GMC is the
third largest flour milling company in the Philippines. Although GMC
is a Filipino company, it is a loyal U.S. wheat importer importing
100% U.S. wheat. Its oil crushing factory uses only beans from the
United States.


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