US embassy cable - 05MANILA1960

C O N F I D E N T I A L SECTION 01 OF 04 MANILA 001960 
 
SIPDIS 
 
STATE FOR EAP/PMBS 
NSC FOR GREEN 
OSD/ISA FOR ALLEN 
DSCA FOR ROSS 
 
E.O. 12958: DECL: 04/29/2015 
TAGS: MOPS, MARR, PREL, PINS, MG, ID, AS, RP 
SUBJECT: PDR SHIFTING TO THE IMPLEMENTATION PHASE 
 
Classified By: (U) Political Officer Paul O'Friel 
for reasons 1.4(b) and (d). 
 
1.  (C) SUMMARY.  Under the personal direction of Defense 
Secretary Cruz, Philippine Defense Reform (PDR) is moving to 
 
SIPDIS 
the implementation phase.  The GRP has requested three 
additional US experts to complement the nine already in place 
to carry out an ambitious, but well thought through agenda of 
reforms ranging from logistics to operations.  The April 28 
US-RP progress review discussions included for the first time 
Australia, which the GRP believes can play a complementary or 
"niche" role in PDR.  Secretary Cruz plans to attend the 
upcoming annual Shangri-La Dialogue in Singapore.  We 
recommend the senior US officials set aside time in Singapore 
to engage Cruz on PDR and other strategic defense issues. 
END SUMMARY. 
 
PDR A CORNERSTONE IN US-RP DEFENSE RELATIONSHIP 
--------------------------------------------- -- 
 
2.  (SBU) Secretary of National Defense Cruz meet at length 
on April 28 with the US Executive Steering Committee before 
the start of the PDR progress review later that day.  The US 
delegation was composed of Defense Security Cooperation 
Agency (DSCA) Director for Middle East, Asia, and North 
Africa Ed Ross, Office of the Secretary of 
Defense/International Security Affairs Principal Director for 
Asian Pacific Affairs Brigadier General John Allen, Joint 
Staff Deputy Director for Asia Brigadier General Jeff 
Remington, and  US Pacific Command J4 (Logistics) Brigadier 
General James Kennon.  In the pre-brief with Cruz, 
Ambassador Ricciardone stressed the importance of PDR to the 
US-Philippine defense relationship.  He urged the Philippine 
Defense Secretary and the Armed Forces of the Philippines 
(AFP) leadership to err on the side of boldness in pursuing 
reform.  The AFP and Department of National Defense (DND) 
were the only key institutions in the Philippines with an 
action plan for reform.  If they succeeded, they could blaze 
a path for other institutions, such as the Philippine 
National Police (PNP) and the judiciary, to follow. 
 
3.  (SBU) Cruz expressed appreciation for US support, saying 
he believed the effort was achievable, sensible, and long 
overdue.  DSCA Director Ed Ross, the chair of the US 
Executive Steering Committee, noted while PDR was off to a 
good start, a tremendous amount of work remained to be done 
to ensure reforms in the AFP penetrated down to the common 
soldier.  Responding to this point, AFP Chief of Staff 
General Efren Abu emphasized his commitment to implement PDR 
and ensure individual soldiers understood "what we're doing 
and why." 
 
4.  (C) Secretary Cruz said that he was achieving success by 
moving systematically to reach out to other elements of the 
Philippine government.  The Department of Management and 
Budget (DMB) had previously been reluctant to approve 
disbursement of even appropriated funds.  Reassured by the 
seriousness of the PDR effort, the DMB had begun to loosen 
its purse strings and had started to allocate P460 million 
(roughly $7.9 million) each month to the Modernization Trust 
Fund, something it had refused to do for four years.  "It is 
important bureaucratically to get DMB and the National 
Economic Development Agency (NEDA) involved in the process," 
Cruz stated. 
 
POTENTIAL AUSTRALIAN ROLE 
------------------------- 
 
5.  (C) Noting Secretary Cruz's discussions on PDR with the 
Australian defense staff during his April 9-16 visit to 
Canberra, BG Allen stated it was a useful and very positive 
development to have the Australians involved. (Note: The 
Australian Defense Attache and a Political Officer of the 
Australian Embassy attended the general discussions, and also 
met earlier with the US team.  End note.)   It was important 
to pursue PDR efficiently and to deconflict assistance, he 
added.  Potentially, cooperation on PDR could serve as a 
model for other countries seeking to transform their 
militaries.  (Note:  Allen later observed similar processes 
could benefit Indonesia and Mongolia.  End note.) 
 
PROGRESS REVIEW INDICATES 
CLEAR TRANSITION FROM PLANNING TO IMPLEMENTATION 
--------------------------------------------- --- 
 
6.  (SBU) The subsequent PDR progress review discussions 
involved Cruz, his senior Undersecretaries, the senior AFP 
leadership, and representatives of the Department of Foreign 
Affairs, and examined in detail the status of each of the 
PDR's ten different plans of action and milestones (POA&Ms). 
Secretary Cruz in his opening remarks stated the USG's steady 
 
SIPDIS 
support had been invaluable in helping the PDR overcome some 
birth pains.  While great strides had been made so far, the 
key to success, he believed, was to ensure effective 
implementation.  Ambassador Ricciardone reiterated to the 
general audience that PDR is one of the most important 
elements of USG engagement with the Philippines.  Real 
resources from both governments were devoted to the effort. 
Each meeting of the Executive Steering Committee had broken 
new ground; this time with the involvement of the 
Australians.  Improvements in field operations by the AFP, 
such as recent engagements involving night helicopter 
insertions, night movement to contact, and night casualty 
evacuations, were testimony to what the two countries were 
doing, and how far they had come together.  "Count on us to 
be in your corner," he said, "But you must lead your own 
reforms." 
 
7.  (SBU) The Philippine PDR briefings discussed how to 
implement PDR effectively.  Internally, the DND intends to 
establish two new Assistant Secretary positions under 
Undersecretary for Philippine Defense Reform Carolina, one 
dealing with program management and the other focused on 
program evaluation, which would be responsible for research, 
strategic communications, budget, and legislative issues. 
Each DND Undersecretary, e.g., Operations, Policy and Plans, 
Finance, Acquisition, etc., would act as program sponsor for 
implementing one or more POA&Ms in cooperation with 
corresponding program managers on the AFP "J" staff. 
Subordinate project managers would ensure buy-in at all 
levels. 
 
REQUEST FOR THREE NEW US EXPERTS 
-------------------------------- 
 
8.  (SBU) The DND also proposed creation of a Joint RP-US 
group that could quickly resolve issues, such as 
establishment of performance measures, effective use of the 
US Subject Matter Experts (SMEs), meshing US Defense Resource 
Management Service (DRMS) support with PDR, and future PDR 
budgets.  SMEs would be fully integrated.  They would advise 
on policy, planning, and implementation; propose realistic 
solutions to implementing PDR; and transfer their skills to 
their Philippine counterparts.  The AFP requested three more 
SMEs in the areas of military education, enlisted 
development, and operations and training, in addition to the 
nine member team already on the ground. 
 
AUSTRALIA COULD PROVIDE "NICHE" EXPERTISE 
----------------------------------------- 
 
9.  (SBU) DND officials described Australian involvement in 
PDR as complementary to the ongoing US-RP bilateral effort. 
They noted that Australia's military, because its size was 
closer to that of the Philippines, could potentially provide 
"niche" expertise in such areas as strategic planning, joint 
doctrine, commercial support, professional military 
education, organization and manpower, maritime security, and 
project management.  For example, the AFP, in order to ensure 
a common vision between DND and AFP counterparts, needed help 
in setting up a short, tailored PDR training course for newly 
designated project managers.  Assistance in this regard could 
come from either the US or Australia, which could also 
provide a SME to assist with development of a DND and AFP 
strategic planning cadre. 
 
"SELLING" PDR 
------------- 
 
10.  (C) The AFP's and DND's plans to "sell" PDR call for 
"embedding" DND/AFP advocates on legislative staffs and 
networking with the Cabinet and other key government 
institutions to gain support for the reform effort.  Well 
developed budgets and plans focused on realistic objectives 
would be used to develop, justify, and account for a 
multi-year defense budget.  Pointing to the successes already 
achieved with the Department of Management and Budget (DMB), 
Cruz noted the DMB had not previously comprehended the DND's 
and AFP's situation and problems. Now, Cruz said, the DMB was 
making an effort "to understand our predicament and 
appreciate we are proposing realistic solutions to real 
problems."  Thanks to the PDR plan, DMB Secretary Boncadin, 
notoriously "married to her job" and "stingy" in releasing 
funds to GRP agencies, evidently "was becoming convinced" of 
the merits of the PDR budget requirements, as she recently 
had released funds more readily. 
 
"ONE BUDGET CONCEPT" 
-------------------- 
 
11.  (SBU) Under the "One Budget Concept," scarce resources 
would be allocated where they are needed most, and not held 
hostage by individual services.  The comptroller function 
would be institutionalized, and a defense-wide 
centrally-administered acquisition system and a professional 
acquisition force established.  Supporting these and other 
functions would be a defense-wide information management 
infrastructure with integrated software applications. 
 
PRACTICAL OPERATIONAL AND LOGISTICS FOCUS 
----------------------------------------- 
 
12.  (SBU) AFP operational aspirations for PDR are practical, 
with the immediate focus on developing combat life saving 
skills and deploying a forward surgical support unit.  Under 
review are efforts to determine the optimum period for 
pre-deployment training, unit rotation policy, and combat 
operations.  Training for enlisted personnel, noncommissioned 
officers, and officers are also targeted.  Although not fully 
developed, efforts are underway to organize and integrate 
civil military operations into AFP doctrine, and develop the 
ability to conduct medical civic action programs (medcaps), 
dental civic action programs (dencaps), and engineering civic 
action programs, (encaps). 
 
13.  (SBU) Logistics concerns include weapons and ammunition 
management, explosive safety, disposal of obsolete munitions, 
and reorganization of the logistics structure to minimize 
cost while retaining operational readiness.  Procurement 
efforts under the Capability Upgrade Program would address 
immediate shortfalls to support overall defense strategies 
and PDR priorities.  The PDR Logistics Team effort needs to 
transition fully into the PDR program, but has succeeded in 
boosting operational readiness rates for key platforms.  The 
UH-1H overall readiness rate stood at 80-percent, while that 
of MG-520s stood at 74.5-percent.  The goal was to establish 
effective maintenance and sustainment for all systems and 
platforms that increased or enhanced mission capability. 
 
PLANNING MEETING SET FOR JUNE 2005 
---------------------------------- 
 
14.  (SBU) The Executive Steering Committee decided to defer 
discussion of payment mechanisms, e.g., Foreign Military 
Sales, to a working group that would study the issue and 
provide recommendations on a system for making spending 
decisions that complied with US and Philippine law.  Both 
sides concurred on the need to synchronize the US Defense 
Resource Management Service (DRMS) and Defense Acquisition 
Service (DAS) support effort with PDR.  A planning meeting 
was set for June to examine the way ahead on the 2005 and 
2006 effort, develop the final POA&Ms, and continue detailed 
planning on current priorities. 
 
COMMENT 
------- 
 
15.  (C) The detailed nature of the PDR progress review is 
convincing evidence that a full transition from planning to 
implementation is now underway.  Cruz's  presence and that of 
his senior staff throughout the day-long discussions are 
testimony to hands-on involvement and personal commitments to 
see the effort through.  Cruz plans to attend the June 3-5 
Shangri-La Dialogue in Singapore.  We recommend the senior US 
participants seize the opportunity to engage Cruz on PDR and 
other strategic mutual defense issues. 
 
16.  (U) Mr. Ross and BG Allen have reviewed this message. 
 
Visit Embassy Manila's Classified website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
Ricciardone