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Considerations for SND Reyes Meeting with Secretary Powell

The GRP may consider the pursuit of the following defense and security
objectives:

1. To continue to build political support in the US and the Philippines for

strengthened bilateral defense cooperation and to continue to position the
government of PGMA as a strong US partner in the global campaign
against terrorism.

2. To chart a stronger mutually beneficial security and defense relationship

with US.

3. To reiterate the importance of U.S. security interests in Asia-Pacific, and

particularly in Muslim states of Southeast Asia where Al-Qaeda operatives
may be establishing a foothold. Secretary Powell’s visit to Asia will
generate extensive media coverage in the United States, and his public
comments while in Manila will give credibility to the importance of the
bilateral military relationship.

4. To continue to position the country as providing regional leadership on

terrorism issues through both bilateral and ASEAN initiatives.

The following are specifics issues and themes during the Powell visit to Manila:

Must-be-raised Issues by PGMA or SND

• Define the success of the current RP-U.S. joint exercises and express
gratitude for the security assistance and training, and lay down new,
obtainable goals and objectives for a second phase of bilateral exercises to
begin in October 2002. State that the recent SONA of PGMA stressed that
our “strategic relationship with the US shall be enhanced through continuing
training exercises to sharpen our soldiers’ capabilities to move and
communicate, to fix and finish off their targets.”
(Media coverage in the United States and in the Philippines has offered a mixed
record of accomplishments for the exercises and training operations to date. It is
important that both governments establish the tangible achievements of the
Balikatan.)

• Define what is at stake in further developing the Philippine-U.S. military

relationship for the Philippines, the United States and for broader Asia-Pacific
security. The Philippines has become a theatre of operations in East Asia for
the global campaign against terrorism. It will remain so even as the armed

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forces are successful in capturing or killing individual terrorist leaders. Like

America’s fight against Al-Qaeda, this is a long-term campaign. Thus, there is
a need for a sustained defense cooperation with the US.

• Remind Secretary Powell that the Philippines responded early in the wake of
September 11 by offering the Bush Administration broad logistical and
operational support during Operation Enduring Freedom – in the face of
domestic criticism and concern. This response has also included a more
aggressive targeting of Philippine-based terrorism organizations like the Abu
Sayyaf Group.

• Reiterate the need for expanded U.S. military assistance for the Philippines,
and the role this support will play in modernizing the Armed Forces of the
Philippines (AFP) and improving its professionalism and operational
capabilities. Urge Secretary Powell and the U.S. State Department to actively
lobby in support of both the FY2002 supplemental appropriation and the Bush
Administration’s proposed FY2003 assistance package currently being
considered in the U.S. Congress.

• PGMA can state the strong need of the AFP to have the MLSA signed.The
draft is being finalized. The signing of the MLSA should be a strong signal to
the US Congress of RP’s willingness to cooperate and to go the full distance
on the operational side of the anti-terror campaign. She can strongly claim
that RP is the US’ best ally to show the world that ASEAN is supporting them
optimally in their anti-terror campaign.

May-be-raised Issues

• PGMA may encourage a post Balikatan RP-US cooperative socio-economic

development program in Basilan. The US may wish to show the world that
once there is security, development can take place. Basilan could be a
showcase for this principle, much more than Afghanistan. Eventually, we
could set up similar development sites in places where post- Balikatan
security cooperation will be sustained.

• PGMA can remind Powell that a new US engagement in the region should
cover political, security, trade, economic, & development cooperation. The US
can take steps to boost development cooperation and remove protectionist
measures in trade. Washington can help in the economic front by making the
US market serve as an engine for an export-driven growth.

• PGMA can ask for a briefing on the status between nuclear rivals India &
Pakistan. There are reports that in the event of a nuclear exchange, fallout

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from the blast can affect RP in varying degrees depending on the time of the
year and prevailing winds.

Regional issues

• Brief Secretary Powell on Philippine efforts to encourage regional cooperation

on security and terrorism issues through both bilateral and multilateral efforts,
including taking a leadership role in ASEAN. This includes the May 2002
agreement signed between the Philippines and several of its ASEAN
neighbors, the enactment of new money laundering legislation and similar
initiatives.

• Brief Secretary Powell on the need for continued U.S. cooperation and
assistance on transnational crime issues that impact the Philippines and
Southeast Asia, including drug trafficking, piracy, smuggling, money
laundering and arms trafficking. Discuss how these issues undermine the
development of democracy and economic development in the Philippines and
across the region.

• Discuss cooperative initiatives that could be part of the agenda at this

year’s United Nations General Assembly in New York, the annual World
Bank and IMF meetings in Washington and the Asia-Pacific Economic
Cooperation (APEC) economic leaders meeting in Mexico.

Other issues

• Remind Secretary Powell that there exists several outstanding bilateral issues
relating to Philippine-U.S. military relations that must be addressed by
Washington – beyond the issue of future joint exercises. These include (1) the
need for the U.S. to meet its benefits obligations to surviving Filipinos who
fought alongside American troops in World War II; (2) the Spratley Islands
territorial dispute with China; and (3) the need for U.S. economic assistance
for poverty-stricken areas of the Philippines that could become future
recruiting grounds for terrorism.

• Brief Secretary Powell on PGMA’s economic and fiscal policies that have
been responsible for low inflation, a stable currency, a return of moderate

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economic growth (projected at 4% for 2002), expanding exports and the

Government’s success in meeting its initial fiscal deficit targets.

Issues that may be Raised by Secretary Powell

• Powell may express the US government’s gratitude to RP and acknowledge

the sacrifices of its people in the global war against terrorism. He will offer to
help map out long-term counter-terrorist programs with the use of US aid.
This cooperation, he will explain, will prove that RP is “a friend” and that the
increase in military aid to RP is the US government’s way of expressing its
appreciation of that support.

• Powell may ask the government to draw up clear and long-term plans for the
utilization of the $55-M counter-terror aid granted to the RP by the US
Congress from the recently-passed $28.9-B Supplemental Anti-Terror Budget
(half of the amount will go to the USDoD). Powell could stress that both
countries can not have a 4-5 month exercise then stop and think of what to do
next. He is looking at a military that can sustain itself. He is expected to
formally propose expanded RP-US military and counter-terrorism operations.

• Powell could ask for an explanation over the controversy generated by the
draft MLSA because Washington was taken by surprise over the controversy.

• Powell will discuss the additional $25-M military aid that will granted to RP.

• As for MLSA & military aid, Powell could in effect say that all the money is
now on the table. It’s time to see what RP has to offer.

• Powell could request the RP Congress’ passage of a strong anti-terrorism bill

that will enable RP security officials to question suspects and to keep them
behind bars.

• Powell could express that the US government is looking forward to working

with DFA Sec. Ople and that they are relieved that PGMA has skillfully
defused the situation with VP Guingona.

• Powell could clarify if RP officials will assert Manila’s rights to prosecute any
captured leaders of the ASG despite Washington’s moves to indict 5 ASG
bandits. State Prosecutor Ricardo Cabaron said, “If they will be arrested, we
will insist that they will be tried first before they will be turned over to the U.S.
Meanwhile, AFP Chief-of-Staff Cimatu said the 5 indicted ASG bandits will

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have to face charges filed against them in RP before any extradition process
can begin.

• Amb. Ricciardone’s statement that RP was losing the economic race in Asia
because of constitutional barriers to foreign investment, perceptions of
widespread corruption, especially in the judiciary, & the lack of infrastructure.
Powell could follow up on what reforms can be taken to address these.

SND & The Way Forward

• SND should discuss with Powell the status and the way ahead for continuing
the robust relationship between the US & RP governments and their
militaries. Specifically, he could take up the training of 2 companies of light
reaction teams (crack anti-terrorism units) cooperation on surveillance and
intelligence work, as well as night-flying exercises using helicopters.
• Manila has become a favorite jump-off point for terrorists bound for the US
because of the lack of sophisticated monitoring equipment at RP airports. The
US has recently assigned anti-terrorism experts to help the Bureau of
Immigration monitor the movements of suspected terrorists entering & leaving
RP. In this regard, SND can request for needed equipment such as high-
speed computers and state-of-the-art communications equipment to make it
more difficult for terrorists to enter RP.
• SND can take up the matter of US assistance to map the undersea floor of
the Kalayaan-Spratly Islands Group. The United Nations Conference on the
Law of the Seas (UNCLOS) has given RP a deadline that is nearing soon.
Failing to map our Exclusive Economic Zone (EEZ) will allow China and other
neighboring claimants to strengthen their claim on these territories and to
initiate hostile actions. The NDCP has material on this. He can cite the AFP
report that China’s armed forces have fortified several islands in the Spratlys.
In addition, the People’s Liberation Army (PLA) is in the process of
modernization to build up its ground, air forces, and its navy. In fact, they
could soon deploy a blue-water navy with an aircraft carrier. Intelligence
sources say that the real budget of the PLA is triple the $30-B officially stated.
• Because the country is a good resource for other countries on how to deal
with disaster, RP, with the help of the US, can leverage SAGIP
exercises/seminars into something more profitable for RP. Other countries
can learn and practice disaster responses and techniques at military bases
for a fee. Better still, maybe the US can transfer technology and relocate
related industries to RP so that its economy is strengthened. This echoes
PGMA’s pitch for more economic cooperation from Washington.

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• Citing Amb. Ricciardone’s complaints on why RP is losing out on investments,

RP and the US could work out a mutually beneficial arrangement wherein
RP’s industrial base is built up by setting up RP as the aircraft/ship/armor
Repair-Maintenance-Overhaul hub for the region. In this way, various
elements of the defense industries, which are now expensive to maintain in
the US due to economies of scale and high wages, can be relocated to RP.
• SND may initiate talks on how RP can potentially play the role of a center for
Information Security, training, & the propaganda creation/production center
for the region. In terms of training, for example, we can establish a modern,
instrumented, live fire training range at Crow Valley. A business plan can be
made as to lease terms for partial use of the range along with other ASEAN
countries.