Cablegate: Scenesetter for Codel Speier


DE RUEHML #2323/01 3090905
O 050905Z NOV 09





E.O. 12958: N/A


1. (SBU) Welcome to the Philippines. Following on major U.S.
disaster relief assistance in the wake of storms that have affected
millions of lives, your visit holds special significance for the
Embassy as well as for the Filipino people and government. Many
Filipinos will study the content of your public remarks for
indications of support for the bilateral relationship. The United
States and the Philippines have a longstanding and deep relationship
based on nearly 50 years of direct American administration, a
Philippine government modeled on the U.S. government, broad economic
ties, and an extensive interchange of people. The more than four
million Filipino-Americans now constitute the largest Asian
ethnicity in the United States, while some 250,000 U.S. citizens
reside in the Philippines.

2. (SBU) You are coming at an interesting and challenging time.
The destruction caused by a recent series of storms has affected
millions of Filipinos, leaving hundreds dead, and hundreds of
thousands of homes damaged or destroyed. Your visit presents an
opportunity to build on the goodwill and gratitude stemming from the
USG's generous, fast, and energetic response to these disasters, and
highlight the very positive U.S. relationship with the Philippines.
Your emphasis on the strong bonds between Filipino Americans and the
Philippines will be especially timely and welcomed by the
government, private sector, and international development partners,
who are working together to recover from the recent disasters,
alleviate poverty, and contribute to economic development.

Activities in a Nutshell

3. (U) During your visit, you will be briefed by the Mission
Country Team and meet with officials leading government and private
sector relief and recovery efforts. You will then visit sites where
USG disaster relief has helped people survive the aftermath of the
storms and flooding and begin the recovery process. You will also
view the Manila American Cemetery and Memorial, which commemorates
more than 50,000 U.S. soldiers, sailors and marines killed or
missing during World War II.

Climate Change a Growing Concern

4. (SBU) President Arroyo has announced the creation of a
multi-sector National Reconstruction Commission, which she tasked
with coordinating international disaster rehabilitation efforts.
Arroyo has requested donor grants, rather than loans, to avoid
adding to the fiscal deficit and noted that "the Philippines is a
victim of climate change, not a culprit." She explained that
"Victims are compensated, not penalized with high interest rates or
conditionalities." President Arroyo also signed the "Climate Change
Act of 2009" into law on October 23. The law's objective is to
factor climate change into policy formulation and poverty reduction

The Economy in Brief

5. (U) The United States is the Philippines' largest trading
partner, with over $18 billion in two-way merchandise trade in 2008.
Major U.S. exports include electronics and agricultural products.
The U.S. is also one of the largest investors here, with over $6.6
billion in equity. The Philippine economy grew by 7.3% in 2007, the
fastest pace of growth in over three decades, but slowed to 4.3% in
2008, and will likely be in the 1-2% range for 2009. However, a
resilient service sector (particularly a booming business process
outsourcing industry) and strong overseas workers remittances
(expected to increase to more than $17 billion in 2009, more than
10% of Philippine GNP) have helped the Philippines through this
period of global economic slowdown.

6. (U) There has been limited progress over the past decade in
reducing poverty and addressing the inequitable distribution of
incomes. Almost half of the population here lives on $2/day or
less. Socio-economic development in the Philippines is uneven with
wide disparities across regions and populations. Poverty is
especially severe in rural areas. Most of the lagging regions and
provinces are in Mindanao, at the southern end of the country, while
Manila and neighboring areas represent the country's most developed
region. While Mindanao features some of the country's more
progressive cities and municipalities, human development indices of
some of Mindanao's most depressed provinces approximate those of the
world's poorest countries.

The Political Situation

7. (SBU) President Gloria Macapagal Arroyo assumed the Presidency
in 2001 after a "people power" protest movement swept out her
predecessor. An economist by trade, she is a tenacious leader who
has faced a series of challenges to her rule, including unsuccessful
impeachment efforts and low-level military coup attempts.

8. (SBU) Presidential elections set for May 2010 are already
reshaping the political landscape as candidates begin aggressively
campaigning. Notable candidates include the current Filipino
Secretary of Defense, Gilbert Teodoro, longtime Senator Manny
Villar, and Senator Benigno "Noynoy" Aquino III, who decided to run
for President following the death in July of his mother, former
President Cory Aquino, one of the most cherished figures in
Philippine politics. Another contender could be former President
Joseph Estrada, who was ousted by popular discontent in 2001. In
2007, Estrada was convicted of corruption and then pardoned by
President Arroyo. It is unclear if his presidential candidacy is
legal. These will be the first nationwide elections featuring
computerized vote tabulation; the automation holds the promise of
more accurate and rapid vote-counting, but many in the Philippines
are anxious about the shift to a new and unfamiliar system.

Human Rights

9. (SBU) President Arroyo has consistently expressed her commitment
to resolving the complex problem of extra-judicial killings and has
taken several steps in this direction. While many of these deaths
and disappearances are more likely attributable to local disputes
than to military or police action, it is clear that the government
needs to do more to ensure that these crimes are fully investigated
and that responsible parties -- whether or not they are connected to
the military or police -- are brought to justice. The problem is
closely related to a judicial system which is inefficient and
strained beyond its capacity. Problems such as violence against
women, abuse of children, child prostitution, child labor,
trafficking in persons, and ineffective enforcement of worker rights
are also common.

Development Challenges

10. (U) Economic development is a key U.S. objective in the
Philippines. Accelerating development involves key, cross-cutting
issues, principally: opening the economic system to more
competition; curbing high population growth; improving agricultural
productivity; basic education and health reforms; building
infrastructure; harnessing fiscal resources; strengthening the
capacity of local government units; effective law enforcement;
improving the investment climate; promoting transparency and
accountability; and addressing peace and security issues. President
Arroyo has called repeatedly for unity and strong partnerships as
the country grapples with global economic challenges and domestic
political concerns with limited resources. Your visit to the
Philippines provides a timely opportunity to reiterate continued
U.S. government support for a long-standing ally during a time of


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