Cablegate: Ambassador Meets with Philippines-U.S. Business Council

VZCZCXRO1423
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #3143/01 2070931
ZNR UUUUU ZZH
O 260931Z JUL 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2195
INFO RUCPDOC/USDOC WASHDC
RUEHZS/ASEAN COLLECTIVE
RUEHLMC/MCC WASHINGTON DC

UNCLAS SECTION 01 OF 02 MANILA 003143

SIPDIS

SIPDIS

STATE FOR EAP/MTS and EAP/EP

TAGS: EINV BEXP ETRD RP
SUBJECT: AMBASSADOR MEETS WITH PHILIPPINES-U.S. BUSINESS COUNCIL

REF: MANILA 2971

MANILA 00003143 001.2 OF 002

1. Summary: Ambassador Kenney and Emboffs met with members of the
Philippines-U.S. Business Council on July 21 to discuss areas of
cooperation between the U.S. and the Philippines, including
agriculture, tourism, English language proficiency, regional hubs,
and trade and investment. The Ambassador highlighted Intellectual
Property Rights (IPR) protection, agriculture, and the Millennium
Challenge Corporation (MCC) anti-corruption initiative as areas for
future collaboration. End Summary.

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Philippines-U.S. Business Council
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2. In a meeting with the Ambassador and Emboffs on July 21, members
of the Philippines-U.S. Business Council highlighted areas of
economic cooperation between the U.S. and the Philippines. Members
of this group are chief executive officers in Filipino corporations
with close business ties to U.S. corporations. The group is one of
five business councils within the Makati Business Club, a prominent
local organization that drew criticism from the government for
expressing support of impeachment proceedings against President
Arroyo in summer 2005.

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Agriculture
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3. Council members complimented U.S. efforts to help the RP develop
the mango industry, citing the U.S. decision to expand Philippine
mango importation to Hawaii, the Marianas, and Guam. Members also
commended USDA assistance to mango growers outside Guimaras (the
only island permitted to export mangos to the U.S.) in penetrating
the U.S. mainland, the recent PL-480 loan to support biotechnology
(see reftel), and USAID's GEM Program in Mindanao. Council members
were concerned about current U.S. tuna tariffs, noting that most
tuna processors are based on Mindanao, and wondered if tariffs would
adversely affect development in the region.

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Tourism
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4. The Council discussed the importance of tourism, as earnings
from tourism comprise 4.9% of GDP and the sector employs 2.6 million
people (0.7% of the national workforce). Council members touted
retirement tourism as a potential growth area due to the rapid
increase in senior travelers, but this will depend on portability of
health insurance and international accreditation of tourist
facilities. The Ambassador observed that the Filipino-Americans are
a natural customer base, and encouraged promotion of other tourist
areas besides beach resorts (such as mountains and rice terraces).
The Council suggested that the U.S. travel advisory be
destination-specific. The Ambassador reminded Council members that
the State Department has a responsibility to American citizens to
provide the most accurate assessment of security concerns in the
country.

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English Language Proficiency
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5. Members expressed concern that Filipinos' English language
ability, crucial to a highly qualified work force, has deteriorated
over the past 13 years. The Ambassador noted that while Peace Corps
and USAID do provide English language training to teachers from
Mindanao, education and cultural exchange programs sponsored by the
Embassy's Public Affairs Section may provide additional nationwide
support. The Ambassador also encouraged the Council to have an open
dialogue with the new GRP Secretary of Education and with English
teaching departments in universities.

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Regional Hubs
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6. The Council highlighted the potential for Clark and Subic
Special Economic Zones to become regional air and seaport hubs,
respectively. Members discussed projects aimed improving
infrastructure and access, and emphasized the importance of
promoting Clark and Subic as investment locations for U.S.
businesses.

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Trade and Investment
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7. Council members noted a rapid expansion in the Philippine's
business process outsourcing (BPO) industry, particularly in the

MANILA 00003143 002.2 OF 002

call center market. The Ambassador stated that the call center
industry provides a niche of opportunity due to Filipino enthusiasm
for customer service, and noted increasing numbers of Filipino
managers in call centers. Members were concerned about new U.S.
port regulations increasing security and inspection procedures for
U.S.-bound shipments.

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Concluding Remarks
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8. The Ambassador concluded the meeting on a positive note by
discussing future areas of collaboration among the U.S., GRP, and
private business. She underscored the GRP's improvements in IPR
enforcement as positive for U.S. businesses based in the
Philippines, and encouraged business leaders to work closely with
the GRP on this issue. The Ambassador applauded the collaboration
between the U.S. and GRP on agriculture, citing the potential for
growth, particularly in the tropical fruit sector, due to U.S.
support for biotechnology development. The Ambassador discussed the
upcoming signing of the MCC Anti-Corruption Initiative in the
Philippines and stressed the need for private businesses to support
efforts against corruption. The Ambassador emphasized the
importance of working together to encourage the success of programs
such as the MCC to achieve greater transparency in business and
government. The Council Chair cited the Coalition Against
Corruption, a private organization promoting government
transparency, particularly in customs and taxes.

KENNEY

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