Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 05MANILA4503, PHILIPPINES: SLOW PACE OF ECONOMIC REFORM

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #05MANILA4503.
Reference ID Created Released Classification Origin
05MANILA4503 2005-09-22 09:35 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Manila
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 MANILA 004503 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/EP, EB/TPP 
STATE PASS USTR FOR BWEISEL AND DKATZ 
STATE PASS USAID AND OPIC 
TREASURY FOR OASIA FOR AJEWELL 
USDOC FOR 4430/ITA/MAC/DBISBEE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PREL KIPR TBIO TSPL RP APEC WTRO
SUBJECT: PHILIPPINES: SLOW PACE OF ECONOMIC REFORM 
 
REFS: A) MANILA 4278, B) MANILA 4112 
 
SENSITIVE BUT UNCLASSIFIED: NOT FOR INTERNET DISTRIBUTION 
 
1.  (SBU) Summary: Philippine government and private 
sector leaders told U.S. Senior Official for APEC Michael 
Michalak that the Philippines continues to face problems 
with inefficient courts and corruption in general.  Poor 
implementation and unpredictable enforcement of laws 
remain disincentives to investment.  They offered a more 
optimistic assessment of the country's fiscal situation, 
although many raised concerns about the implementation of 
the new expanded Value Added Tax (EVAT).  The Millennium 
Challenge Account (MCA), many said, is an encouraging 
development that could lead to much needed structural 
change.  End Summary. 
 
-------------------- 
Informing about APEC 
-------------------- 
 
2.  (SBU) During his September 19-20 visit to Manila, 
U.S. Senior Official for APEC Michael Michalak briefed 
GRP leaders on U.S. priorities in APEC.  He told them 
that the U.S. will pursue three key objectives at the 
high-level APEC meetings in November: 1) advancing the 
Doha Development Agenda in preparation for the December 
WTO Ministerial in Hong Kong; 2) addressing energy 
security in the region, especially related to high oil 
prices and the impact on the regional economy; and 3) 
formulating a strong response to the potential Avian 
Influenza pandemic.  He also sought their views on the 
U.S.-RP economic relationship and encouraged them to use 
the funds available under the MCA to implement needed 
structural reforms. 
 
------------------------------- 
Good laws, lousy implementation 
------------------------------- 
 
3.  (SBU) Former Trade Secretary Senator Manuel "Mar" 
Roxas, who chairs the Trade and Commerce and the Economic 
Affairs committees in the Senate, told Michalak that 
implementing legislation and fighting corruption are the 
GRP's biggest challenges.  The GRP must take structural 
approaches to combating smuggling and improve the 
country's trade outlook, according to Roxas.  However, 
the level of corruption in the Bureau of Customs (BOC) 
makes reform progress difficult, he said.  Roxas was 
eager to explore possibilities of linking APEC security 
measures to initiatives detecting smuggling.  Because 
corruption is so much a part of the BOC culture, he said, 
the GRP must, in effect, create an external mechanism to 
police the BOC.  Michalak urged Roxas to partner with the 
business community on such initiatives and to solicit its 
input on which structural reforms are most needed.  Roxas 
was optimistic that some of the GRP's MCA programs could 
be used to address these issues. 
 
4.  (SBU) Roxas said there is a perception in the RP that 
trade liberalization has failed to deliver promised 
benefits, but acknowledged this is due largely to the 
oligarchic power structure and GRP's failure to implement 
necessary structural reforms.  The GPR should have done 
more to solidify reform and ensure competition in the 
domestic market at the same time it was lowering tariffs, 
he admitted.  Roxas told Michalak that he now espouses a 
more cautious approach to liberalization because of these 
structural shortcomings.  Citing the GRP's lack of 
expertise in trade negotiations, he said he is submitting 
legislation to create a "Special Trade Representative" 
similar to USTR.  The position may be an office in the 
Department of Trade and Industry or a separate official 
under the Office of the President, he said, but would 
focus exclusively on the RP's international trade agenda. 
 
------------------------- 
EVAT will be implemented 
------------------------- 
 
5.  (SBU) Senator Ralph Recto, chairman of the Senate 
Ways and Means Committee, told Michalak he is optimistic 
that the EVAT will be implemented in full within the next 
two to three weeks (ref B).  The conditions have already 
been met, said Recto, for President Arroyo to 
automatically trigger the VAT rate increase to 12% from 
10% in January 2006.  Recto estimated the EVAT will 
generate 80-100 billion pesos (1.4-1.8 billion dollars) 
in additional revenues in 2006 and will enable the GRP to 
address many of its current fiscal difficulties. 
 
6.  (SBU) Recto discounted attempts to pass a joint 
resolution delaying the imposition of VAT on fuel and 
electricity until June 2006.  He said the House will be 
too preoccupied with passing the budget and debating 
Constitutional changes to push the issue much further. 
He finds it frustrating, he told Michalak, that President 
Arroyo is now sending mixed signals on whether Congress 
should delay EVAT implementation, especially after she 
pressed lawmakers to pass a tax increase they did not 
favor.  Recto said he has always favored expanding the 
tax base over increasing rates and fears that a delay in 
lifting exemptions on fuel and electricity could erode 
the effectiveness of the new measure. 
 
--------------------------- 
Cha-Cha could open markets 
--------------------------- 
 
7.  (SBU) Recto told Michalak that redrafting the 
Constitution could offer opportunities on trade and 
investment liberalization.  Michalak encouraged Recto to 
support liberalization and said this may be an 
opportunity to update provisions related to the business 
climate in a very positive way.  Recto agreed.  He linked 
the emigration of many talented Filipinos to investment 
climate problems that he said are related to 
constitutional limits on foreign ownership of land and 
certain businesses and the entry of non-Filipinos into 
certain professions.  Charter change does not currently 
have enough support to receive the necessary two-thirds 
of votes in the Senate, he said, but he and others may be 
open to the change if restrictions on foreign investment 
are lifted.  This is the only way, according to Recto, to 
increase foreign investment in the Philippines, which is 
lagging far behind neighboring countries. 
 
---------------------- 
GRP needs more revenue 
---------------------- 
 
8.  (SBU) House Committee on Trade and Investment 
Chairman Congressman Junie Cua told Michalak that, amidst 
the difficulties the RP now faces, even small statements 
of U.S. support help.  The Philippines continues to be 
interested in a free trade agreement with the U.S., he 
said, but would be very cautious in negotiating on 
agriculture issues.  Michalak replied that the U.S. will 
likely continue to work through the current Trade and 
Investment Framework Agreement (TIFA) instead of 
immediately engaging on FTA discussions, but emphasized 
that the Millennium Challenge Account is a sign of how 
serious the U.S. is about assisting the Philippines. 
 
9.  (SBU) The GRP budget deficit continues to be of 
concern, Cua said, and the government needs to generate 
more revenue.  However, the imposition of the EVAT will 
be "hard" and it might be "politically desirable" to 
delay the VAT on electricity and gasoline to let recent 
political turbulence cool off.  He said it looks like tax 
and customs collection figures are improving, but he 
admitted there is still much to do on this front.  On 
IPR, he said that members of Congress want to ensure that 
the legislation they provide (such as the Optical Media 
Act) is enforced.  Oversight, he said, will be more 
vigorous because "if we just pass legislation and there 
is no follow-through it won't be worth it." 
 
---------------------------------- 
Need more anti-corruption justices 
---------------------------------- 
 
10.  (SBU) Ombudsman Simeon Marcello told Michalak his 
greatest obstacle to prosecuting corruption cases is the 
low number of cases the Philippine corruption court 
("Sandiganbayan") is able to handle.  The key to change 
is increasing the number of justices and allowing single 
justices to hear cases instead of using the current panel 
system, he said.  Acknowledging the need to improve anti- 
corruption efforts, Marcello asked, "How can I fight a 
war without soldiers?"  The budget now before Congress 
increases his office's funding by enough to add an 
additional 48 prosecutors and 200 investigators to his 
staff, but according to Marcello, that is still not 
enough.  He estimated he needs another 100 prosecutors to 
effectively pursue all of the cases the Ombudsman's 
office should be prosecuting.  Even with the increased 
budget, he said it will be difficult to find enough 
qualified individuals to fill the new positions because 
authorized salaries are low.  He also said that if he 
files more than the current number of cases each month, 
the court would not have the capacity to hear all of the 
cases.  He was hopeful that some of the MCA money the 
Philippines may receive will be used to address these 
inadequacies. 
 
---------------------------- 
Business leaders pessimistic 
---------------------------- 
 
11.  (SBU) Michalak also met with American and Filipino 
Business leaders during his visit.  They welcomed the 
news that APEC is pursuing action on Avian Flu, 
underscoring that a widespread outbreak could be 
devastating for the region (ref A).  There was limited 
awareness of APEC's activities among leaders not already 
engaged on APEC, but APEC Business Advisory Council 
(ABAC) members are influential in Philippine circles. 
Former Foreign Affairs Secretary and ABAC member Roberto 
Romulo told Michalak he thinks trade facilitation should 
be the top priority for APEC.  He noted that the growing 
number of FTAs in the region sometimes disrupts trade 
more than stimulates it.  Templates for WTO-plus 
agreements from APEC could prove useful in ensuring that 
these trade pacts harmonize.  Michalak told ABAC members 
that the U.S. hopes to see ABAC more active in APEC 
deliberations. 
 
12.  (SBU) Concerning the economic situation in the 
Philippines, the business leaders were uniformly critical 
of the Philippine courts and the BOC.  Potential 
investors need more predictability from both regulatory 
agencies and the courts in interpreting laws, they said. 
While agreeing that East Asia will be a growth driver for 
firms, both American and Filipino business executives 
expressed concern that the Philippines is becoming 
marginalized.  Business leaders said the Philippines does 
not stack up against other investment destinations 
because of the unpredictable implementation of laws and 
regulations as well as rising labor costs. 
 
Johnson