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Cablegate: Powerful Lobby and Questionable Lobby Back

This record is a partial extract of the original cable. The full text of the original cable is not available.





E.O. 12958: N/A

REF: A) STATE 220695



1. (SBU) Econ Counselor met with Department of Health
Undersecretary Padilla on December 12 to urge GRP to consult
fully with industry representatives before signing the
Revised Implementing Rules and Regulations (IRRs) of the
Philippines "Milk Code" into law. Padilla provided a copy
of the latest draft IRRs, noting that several controversial
provisions had already been removed. Unable to cite
supporting data, Padilla contended that the IRRs are needed
to reverse supposedly declining breastfeeding rates. He
further claimed that this trend contributed to high child
mortality rates in the Philippines. Industry
representatives have countered that milk formula use remains
quite low in the Philippines. Industry is working with the
GRP to clarify the issues, but the influential breastfeeding
lobby has created a great deal of momentum, which could push
the Revised IRRs into law before they are fully understood
by both sides. Padilla agreed to place a temporary hold on
the IRRs, but said that the IRRs might be signed by the
Secretary of Health before early February. END SUMMARY

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3. (SBU) Econ Counselor met with Undersecretary of Health
Alex Padilla on December 12 and underscored the importance
of consulting with industry representatives on the draft
Revised Implementing Rules and Regulations (IRRs) for
Executive Order 51 (EO 51) before signing them into law.
Padilla said that DOH "really understands the industry's
concerns" and that discussions with all parties have been
ongoing for several months. He noted that DOH held a one-
day public forum in August or September, which was attended
by 500 people representing industry, government and non-
governmental organizations. Padilla added that another
public forum would be unproductive since both sides of the
debate are fixed in their positions, and the DOH is already
aware of both views. Padilla agreed to raise Embassy
concerns with the Secretary of Health.

4. (SBU) Padilla provided us with an updated draft of the
IRRs. He pointed out that the prohibition on using brand
names and company logos has been removed for milk
replacement products for use with infants over three years
of age. DOH also removed a earlier requirement for
prescriptions for infant formula products. However,
industry still has objections to the IRRs, which are
detailed below.

5. (SBU) The supposed intention behind the draft Revised
IRRs is the encouragement and promotion of breastfeeding and
its health benefits. Without citing any data, Padilla went
on to make a number of observations and conclusions to
support the draft IRRs. Since the enactment of EO 51 in
1987, according to Padilla, breastfeeding rates in the
Philippines have declined significantly. He said that 16
percent of mothers now exclusively breastfeed their infants
up to six months of age. He argued that during this period
of decline in breastfeeding, infant formula sales have
increased dramatically. Padilla added that the Philippines
has a high mortality rate for children under five years of
age and that diarrhea is a significant cause of death for
this group. He singled out infant formula, as a "major
cause of diarrhea" or a significant contributing factor.
Padilla could not identify studies that support these
statements but promised to provide the Embassy with
additional information and data. (Note: Poor water
filtration is a more likely cause of diarrhea. End Note.)

6. (SBU) The IRRs are in the final clearance process in
the DOH Executive Committee, where they have been under
discussion for the last three weeks. The final draft is
completely at the discretion of the Executive Committee.
Once approved, it will move forward to the Secretary of
Health who has final authority and may reject, approve or
modify. Padilla added that once signed, an announcement
must be published in the local press two weeks before the
IRRs take effect. He said that it was his understanding
that the DOH Secretary would likely sign the IRRs by the end
of January or early February.

7. (SBU) The Department of Health is under pressure by an
influential breastfeeding lobby group, headed by 81-year old
Larry Henares, special assistant to the President.
According to Padilla, Henares is extremely vocal on the
issue and has made this campaign his final objective before
retiring. Padilla showed Embassy hundreds of signed
petitions that Henares has collected from various
individuals and entities advocating the implementation of
the IRRs. He has presented these neatly bound volumes to


8. (SBU) A representative of Abbot Laboratories and of the
Pharmaceutical and Healthcare Association of the Philippines
(PHAP) spoke with U/S Padilla on the phone on December 13
and will meet with him on December 15. Industry remains
opposed to the IRRs for the following reasons:
A) Many provisions of the draft IRRs exceed the original
scope of the law.
B) Certain provisions seek to prohibit rather than
regulate, which is unconstitutional.
C) Certain provisions infringe on intellectual property
rights (Note: This may no longer be a concern since the
provision prohibiting promotion of brand names has been
D) The draft IRRs define "infants" as three years of age
or less, which exceeds international standards.
E) The IRRs would ultimately harm the consumer by denying
information. It will also damage the milk industry and
negatively affect employment.

9. (SBU) PHAP did a quick analysis of infant formula use in
the Philippines and found that the market penetration rate
is only about nine percent, which reflects a low level of
infant formula use. PHAP said that it is common practice in
the Philippines, especially among the poor, to feed babies
sweetened condensed milk or rice water. PHAP conveyed this
information to U/S Padilla and will discuss it further with
him in their December 15 meeting. (Note: In order to
determine the rate of market penetration, PHAP took the
annual birth rate and then increased that number by 50
percent in order to account for babies that would have
already been six months of age at the start of the new year.
They then estimated the amount of tonnage of infant formula
needed if 100 percent of these babies were fed exclusively
on infant formula. They took this figure and compared it to
the actual market, based on a Nielsen audit, and arrived at
the nine percent penetration rate. End Note.)

10. (SBU) According to PHAP, Padilla said that if this
information is correct, DOH could be "barking up the wrong
tree." However, Padilla added that it is going to be
difficult to stop the momentum and that the industry's only
recourse is to have the President tell the Secretary of
Health not to sign the law, perhaps to avoid controversy.
PHAP is following up with a letter to the President.


11. Industry is talking to the Department of Health and
certain industry concerns have already been addressed.
However, conflicting or nonexistent data indicate that there
is still much to be clarified, including whether the
assumptions upon which the IRRs are based are valid. The
link between high diarrhea rates and formula feeding is not
compelling; a strong correlation is unlikely. There seems
to be a lot of misinformation circulating and poor
dissemination of accurate health information. Industry
continues to advocate that it supports breastfeeding as the
best choice for infants under six months of age, but that
for those mothers who cannot breastfeed, it is important to
have a viable, nutritional alternative and adequate
information on its proper use. U/S Padilla seemed
responsive to USG concerns and continues to consult with
industry, but the Department of Health could ultimately
buckle under pressure from the influential breastfeeding
lobby. Post will continue to raise this issue with
appropriate officials.


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