Cablegate: Philippine Elections: Favorite Son Hits Softball

DE RUEHML #0164/01 0270649
O 270649Z JAN 10




E.O. 12958: N/A
SUBJECT: Philippine Elections: Favorite Son Hits Softball

REFS: A) Manila 135 (Ambassador-Aquino Farewell Call), B) Manila 60
(Ambassador-Teodoro Farewell Call), C) 09 Manila 2098 (Price
Controls in Typhoon Aftermath)


1. (SBU) Summary: Philippine presidential candidate Senator
Benigno "Noynoy" Aquino's January 21 luncheon speech to an invited
audience focused on his economic advocacies and the faults of the
current Arroyo Administration. The speech was well-received; no
surprise given the anti-Arroyo Administration reputation of the
sponsoring Makati Business Club. End summary.

2. (SBU) Front-running Philippine Liberal Party presidential
candidate Senator Benigno "Noynoy" Aquino's January 21 luncheon
speech to a standing-room-only crowd of about 450 Makati Business
Club (MBC) members and invited guests marked one of his first
attempts to sell himself to the powerful business and opinion
leaders of the national capital region. In his less than 20-minute
speech, Aquino laid out a pro-business, pro-market agenda while
criticizing the current Arroyo Administration. The speech was
enthusiastically received and interrupted by applause several times.

Makati Business Club

3. (U) Established in 1981, the MBC is a prestigious non-profit
organization that serves as a forum for ideas on economic, social,
and political issues affecting Philippine development. It has about
800 chief executive officers and senior executive members
representing 450 of the largest companies in the country. The main
thrust of the MBC is to promote the role of the private business
sector in national economic development efforts. The MBC has been
an outspoken critic of the Arroyo Administration.

Man for the Job?

4. (SBU) Perhaps to counter criticisms about his seeming
under-performance as a first-term lawmaker, Aquino noted that the
Philippines did not suffer from a lack of laws but from the weak and
inconsistent implementation of laws. He had therefore focused his
efforts as a senator, he explained, on initiating and participating
in congressional probes and investigations, including the First
Family's alleged involvement in bribery by the Chinese ZTE company
for a cyber education project, the fertilizer scams at the
Department of Agriculture, anomalous infrastructure projects, and
accountability for the government's confidential intelligence funds.

5. (U) Aquino said that the country's problems are well-known and
the solutions identified. He mentioned the deficits of good
governance, accountability, political will, and commitment to
national transformation. He lamented the shrinking middle class and
the declining education system.

Free and Fair Playing Field for Business

6. (U) Senator Aquino noted that the Philippines needed to move
away from inward-looking competitiveness based on cronyism and
relationships used to obtain favors towards free and fair
competition that would spur Philippine economic growth in a
globalized environment. He vowed that, if elected, his
administration would simplify business processes and procedures to
better serve the public and investors; and would not use regulatory
systems for harassment and extortion.

No New Taxes

7. (U) Despite the growing government budget deficit and his own
reference to a looming fiscal crisis, Senator Aquino promised there
would be no new taxes if he were elected. Aquino said that good
governance and a strong anti-corruption campaign could reduce
revenue losses caused by smuggling, tax evasion, and waste in the
national budget. He drew strong applause for favoring lower tax
rates for all, expanding the tax base, and removing exemptions for a
privileged few. Aquino said he believed that markets knew best what
opportunities to target and that he would rationalize fiscal
incentives if elected.

Infrastructure and Agriculture

8. (U) Senator Aquino noted the need to transform infrastructure
projects from sources of scandal and waste to models of cooperation
and efficiency; from sources of riches for a few to employment
generators to boost the economy. He called for local government
units to pursue cooperative initiatives with the private sector on

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infrastructure projects with benchmarks to evaluate and monitor

9. (U) The Senator vowed to review all programs of the Department
of Agriculture to eliminate waste and improve efficient use of
resources. He expressed wounded pride that countries such as
Thailand and Vietnam previously sent their experts to learn from the
Philippines but now led in agricultural productivity.

Attacks on the Arroyo Administration

10. (SBU) Senator Aquino's speech was peppered with attacks on the
Arroyo Administration, which he described as overshadowed by
scandals and driven by self-interest and day-to-day political
survival. The Senator criticized government-imposed price ceilings
on basic commodities following the typhoons of 2009. He noted that
when President Arroyo was his Economics professor at Ateneo
University she had espoused minimal government intervention. He
characterized the imposition of price controls on basic commodities
and petroleum products from late September to mid-November 2009 in
some typhoon affected areas as a populist move signifying political

Follow-up Questions

11. (U) During a question and answer session following his speech,
Aquino addressed population policy; the deteriorating education
system; the Marcos wealth and alleged wrongdoings of President
Arroyo and her family; and the role his family would play if he were
elected President.

-- Population Policy: Aquino responded that he supported further
discussion on the reproductive health bill, including inputs from
the Catholic and other churches, but envisioned the role of
government as reminding/educating its citizenry on responsible
parenthood without dictating method or family size, and respecting
individual freedom.

-- Education System: The Senator noted the need to address the
classroom shortage and expressed support for increasing basic
education from 10 years to 12 years. He called for greater
cooperation with the private sector in public education and
reiterated that increased funding for education would come from
improved revenue administration and congressional discretionary

-- Accountability: Aquino stressed that laws would be upheld and
that his administration would work to recover ill-gotten wealth from
prior administrations. He said he would instruct the Department of
Justice to investigate allegations of corruption against President
Arroyo and her family and file the appropriate criminal charges as
one of the priorities of the first six months of his administration.
He also noted the need for judicial reform, citing low conviction
rates and protracted judicial proceedings; and for using public
officials' Statements of Assets and Liabilities as a tool for
holding officials accountable for unexplained wealth.

-- Family Influence: Aquino joked that his youngest sister Kris
Aquino-Yap (a well-known media personality) would remain his fashion
adviser and that his other three sisters only wanted to return to a
life of anonymity after the elections. He said he sought to benefit
from the wisdom of his uncle, prominent businessman Jose "Peping"
Cojuangco, and other sources but that, ultimately, his decisions and
actions were his own.

At Ease Before the MBC Crowd

12. (SBU) Comment: Described by some as lacking charisma and
confidence, Aquino seemed comfortable, witty, and able to think on
his feet before the supportive MBC crowd. The similarity between
Senator Aquino's stated positions and the views of the audience was
not surprising given that MBC members reportedly played a
significant role in convincing Aquino to enter the presidential
race. Aquino won 61% of the votes in a December 2009 survey of MBC
members on whom they would elect President. Interestingly, we heard
a number of attendees at the MBC speech comment positively on the
Administration's standard bearer, former Defense Secretary Gilbert
Teodoro (Aquino's second cousin); but they expressed discomfort
about Teodoro's close association with President Arroyo. Teodoro,
lagging in national surveys, emerged second (14% of votes) in the
MBC survey.

13. (SBU) Although the Makati Business Club does not reflect the
electorate of the Philippines, Aquino's revered parents and hopes
that he can provide leadership for a new economic, moral, and
political order continue to figure heavily in his commanding lead in
national opinion polls. His affiliation with prominent business and
opinion leaders, including several cabinet officials of previous

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administrations, appears to be trumping uncertainties among the
Philippine business elite about his relative inexperience. And
while MBC members may command relatively few votes, they will be
substantial donors in the campaign, which officially opens February
1. End comment.


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