US embassy cable - 05MANILA5287

UNCLAS SECTION 01 OF 02 MANILA 005287 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/MTS and EAP/EP 
TREASURY FOR OASIA 
USDOC FOR 4430/ITA/MAC/ASIA & PAC/KOREA & SE ASIA/ASEAN 
STATE PASS USDA/FAS FOR ROBERTS, SHEIKH, HENKE & YOUNG 
 
E.O. 12958: N/A 
TAGS: ETRD, EPET, EAGR, PREL, RP, APEC, WTO 
SUBJECT: PHILIPPINES TAKES REACTIVE STANCE TOWARD APEC 
 
Sensitive but Unclassified - Not for Internet - Protect 
Accordingly 
 
1.  (SBU) Summary. The GRP views the APEC agenda 
positively.  The GRP's overarching approach to the 
upcoming APEC meetings is to wait and see what other 
members put on the table and then react according to RP 
interests.  With respect to WTO Doha Round issues, senior 
officials express hope for balanced language that 
reflects equally the interests of developing and 
developed nations in improving market access for both non- 
agricultural and agricultural goods.  The RP strongly 
supports APEC's avian influenza (AI) initiative and is 
providing full political backing at the highest levels to 
prepare for a potential AI outbreak in the Philippines. 
The RP is also eager to work within APEC to address 
energy concerns and is looking for regional approaches to 
ensure greater energy security, stable prices and reduced 
dependence on oil imports. 
 
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GRP's Overall Strategy 
---------------------- 
 
2.  (SBU) Ramon Kabigting, Director of the Bureau of 
International Trade Relations at the Department of Trade 
and Industry and Alternate APEC Senior Officials Meeting 
Leader, described the GRP's strategy at the APEC meetings 
to Econoff November 8 as "reactive rather than 
offensive."  He said the government tends to wait and see 
what other members put on the table and then decide 
whether it is in the Philippines' general interest. 
Kabigting, who will be attending the entire week of APEC 
meetings, said the one issue the GRP expects to be more 
proactive in is technical assistance and capacity 
building.  The GRP does not want to see funding used "to 
teach each other how to negotiate at the WTO," but would 
prefer APEC allow developing country members to access 
the money to build up their infrastructure. 
 
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WTO Doha Agenda 
--------------- 
 
3.  (SBU) Kabigting said that he wants the Leaders' 
statement (draft Busan Declaration) to be "balanced" by 
urging developing nations to move forward on market 
access but also urging developed nations to really open 
up their markets, particularly in the agriculture sector. 
He referred to the WTO statement as asking APEC for 
"ambition with respect to non-agricultural market 
access," which he believes has already been agreed upon 
by member countries.  He does not see much progress in 
liberalizing agriculture markets, despite the U.S. offer, 
though the Philippines would like to see a breakthrough 
on market access.  He said his guidance is to support the 
Swiss Formula, even though he and his GRP colleagues know 
that this will be difficult for some members.  The 
delegation's instructions are to try to help these 
members look for solutions to overcome difficulties. 
 
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Avian Influenza 
--------------- 
 
4.  (U) The Philippines supports the APEC initiative on 
preparing for and mitigating an Avian Influenza (AI) 
pandemic and GRP is committed to take urgent measures to 
improve response and preparedness capabilities.  The 
Philippines has a four-stage Avian Influenza Protection 
Program covering the prevention and control of AI 
outbreaks in poultry and humans.  President Arroyo has 
emphasized the GRP's commitment to AI preparedness.  She 
recently appointed Agriculture Secretary Domingo 
Panganiban as the "anti-Avian Flu Czar" to lead inter- 
agency efforts to prevent and control Highly Pathogenic 
Avian influenza (HPAI) outbreaks, and Mass Media 
Secretary Cerge Remonde to mount an all-out information 
 
SIPDIS 
drive to make the general public aware of the disease. 
 
5.  (U) Agriculture officials welcomed the regional 
cooperation and the need to closely collaborate among 
APEC members and international organizations to prepare 
for the AI threat and take decisive preventive action, 
including technical assistance. Kabigting also commented 
that the world has to join hands and the GRP is "happy to 
support" the APEC statement on that subject. 
 
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Energy 
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6.  (U) The Philippines is eager to work within APEC to 
find ways to mitigate the high price of oil, a problem 
that the GRP has grappled with for many months to head 
off transportation strikes and street demonstrations. 
The Philippines imports 95% of its oil needs; the rise in 
crude oil costs over the last year has added two 
percentage points to inflation and reduced GDP growth. 
The country also has some of the most expensive 
electricity rates in Asia, a deterrent to investors, and 
those rates will increase further as oil prices rise. 
The GRP is looking for regional solutions to ensure 
greater energy security, stable prices, and reduced 
dependence on oil imports.  The GRP declined a domestic 
oil stockpile but may push for a regional one, and may 
also pursue more domestic refining capacity. 
 
7.  (U) Although many of the items discussed at the APEC 
Energy Ministers meeting in October resonate with the 
Philippines, the Leaders' Statement encapsulates only a 
few of these.  The GRP is already cooperating on energy 
investment, notably through the joint exploration of the 
Spratly Islands with Vietnam and China.  It would also 
promote technology development for fuel additives such as 
bioethanol.  The GRP has encouraged energy conservation 
and has diversified its energy use in power generation to 
include a healthy mix of renewables, coal, natural gas, 
and hydro.  As Kabigting pointed out, the GRP supports 
the APEC positions outlined in the Leaders' Statement to 
address the high price of oil and reduce reliance on 
fossil fuels in general. 
 
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Comment 
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8.  (SBU) The GRP generally supports the APEC Leaders' 
Statement and is not likely to present any surprises at 
the upcoming meetings.  The Philippines does not have any 
specific issues to raise; the GRP is adopting a reactive 
strategy and will basically wait to see what other 
members bring to the discussion.  The GRP is keen on 
increased regional cooperation, particularly in energy 
issues and avian influenza.  Given the RP's reactive 
stance, they may be flexible and willing to support some 
of our interests. 
 
9.  (SBU) The GRP hopes to see progress on agricultural 
market access and will push for language that equally 
represents the needs of both developed and developing 
nations.  While DTI indicates that the GRP is supportive 
of increased market access, they have not been supportive 
of developed country action on domestic support being 
tied to improved market access by developing countries. 
As a net food importing country, the GRP only has the 
market access pillar to negotiate on, and we anticipate 
that their "wait and see attitude" at APEC will be 
closely tied to the positions of some of the more 
protectionist members of the G-20/G-33.  End Comment. 
 
JONES