Cablegate: U.S. Support for Mindanao Chambers of Commerce

VZCZCXRO3526
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #4523/01 3030717
ZNR UUUUU ZZH
O 300717Z OCT 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3701
INFO RUEHZS/ASEAN COLLECTIVE IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 004523

SIPDIS

SIPDIS

STATE PASS USDA/FAS
STATE FOR EB/CIP AND EAP/MTS
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE

E.O. 12958: N/A
TAGS: ECON ECPS ETRD EINV RP
SUBJECT: U.S. SUPPORT FOR MINDANAO CHAMBERS OF COMMERCE

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Summary
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1. As part of the Embassy's broader Mindanao strategy, the U.S.
Commercial Service in Manila hosted a roundtable meeting on October
20 with representatives of twelve Chambers of Commerce from
Mindanao. Ambassador Kenney met with the group and exchanged views
of prospects for economic growth and closer business ties between
U.S. firms and this troubled region. As part of this program, The
U.S. Foreign Commercial Service in Manila signed Memoranda of
Understanding with the Marawi and Tawi-Tawi Chambers of Commerce.
With Memoranda of Understanding with 16 Mindanao-based Chambers of
Commerce, the U.S. Foreign Commercial Service is creating a
framework for building closer business ties and promoting peace and
prosperity in this region. End Summary.

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Ambassador Highlights Mindanao's Economic Potential
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2. On October 20, the Ambassador witnessed the signing of Memoranda
of Understanding between the U.S. Foreign Commercial Service in
Manila (FCS Manila) and the Marawi and Tawi-Tawi Chambers of
Commerce, both of which are located in the Autonomous Region in
Muslim Mindanao. Representatives from twelve other Mindanao
Chambers, FCS Manila, the Foreign Agricultural Service (FAS), USAID,
and ECON attended the event. The Ambassador praised Mindanao's rich
variety of cultures and diversity of talent. She highlighted the
need for Mindanao to continue to focus on infrastructure development
and the ongoing peace process. Chamber members expressed strong
appreciation for U.S. development assistance in Mindanao. The
Ambassador noted the importance of planning for long-term economic
prosperity, looking to the time when economic assistance is no
longer needed.

3. Representatives of individual Chambers discussed issues specific
to their regions. A representative from the Surigao Chamber noted
that the mining industry has great potential in the region, and
should be attractive to U.S. investment after the 2005 Supreme Court
decision upholding the 1995 Mining Act allowing foreign mining
companies in the RP. The representative from the Marawi Chamber
discussed concerns about poverty and misconceptions about Muslims in
the Autonomous Region in Muslim Mindanao and emphasized the need for
continued U.S. assistance, particularly in education. The Tawi-Tawi
chamber representative said he hoped the recent kidnapping and
release of USAID contract employees in Sulu would not affect USAID
programs in Mindanao. The Ambassador replied that the kidnappings
were unacceptable and, while the USG will suspend work wherever
conditions are unsafe, the USAID-funded programs in Mindanao will
continue. Chamber representatives from General Santos City
discussed the dominance of the tuna industry in their region and how
their Mayor is looking for ways to develop other industries.

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U.S. Support for Business Development in Mindanao
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4. One key aspect of Embassy Manila's strategy to promote peace and
prosperity in Mindanao is to provide extensive support for Mindanao
business development through programs administered by FCS Manila,
USAID, and FAS. FCS Manila has now established MOUs with 16
Mindanao-based Chambers of Commerce to help U.S. companies partner
with Mindanao-based firms and expand U.S. trade links in Mindanao.
The MOUs are informal undertakings to develop trade opportunities,
share business contacts, and engage in joint business promotion
activities. USAID is providing assistance through the Growth with
Equity in Mindanao (GEM) Program. The GEM Program is aiding the
development of business support organizations, including business
councils, 18 Chambers of Commerce, and producer associations. FAS
programs focus on developing agricultural trade between the U.S. and
the Philippines, and FAS has provided food aid worth approximately
$200 million since 2000. During FY 2006, the U.S. is providing
69,000 metric tons of rice valued at $20 million through PL-480
Title I to support the Philippine government's programs in
agricultural biotechnology and modernization. FAS also provides
food assistance through grants to non-governmental organizations.

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Plans for Future Bilateral Trade Activities
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5. To deepen relationships between U.S. business and the Mindanao
Chambers, members suggested holding regular meetings to discuss
issues in specific sectors, including tourism and information
technology. A subsequent general meeting may be held, possibly
during a U.S. trade mission to Manila or Cebu. Members also

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suggested that FCS Manila or the American Chamber of Commerce
sponsor seminars on doing business in the U.S., focusing on specific
product clusters.

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PCCI Dispute Emphasizes Importance of Individual MOUs
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6. Separately, the Davao Chamber of Commerce disaffiliated itself
from the national Philippine Chamber of Commerce and Industry (PCCI)
and the PCCI Vice-President for Mindanao and all Mindanao-based PCCI
governors resigned en masse on October 19. The Davao Chamber
claimed the PCCI had unilaterally decided to reduce the number of
Mindanao chamber regions from 8 to 5 on October 18, and accused the
PCCI of disregard for due process and insensitivity to cultural
differences in Mindanao. According to chamber leaders, the Davao
Chamber has its own revenue sources and direct access to foreign
funding, and can afford to be independent of the PCCI. Davao
Chamber leaders also claimed that 16 Mindanao chambers intended to
break from the PCCI. PCCI leaders downplayed these events, stating
that they reduced the number of regions to ensure equal
representation among chambers, and that only the Davao Chamber has
resigned.

7. While the Embassy is not involved in any aspect of this dispute,
these developments highlight the importance of MOUs with individual
Mindanao chambers. The Embassy's roundtable meeting with the
various MOU chambers from Mindanao helped to build relationships
with these emerging business organizations in a positive and
apolitical manner, and ensures opportunities for future dialogues.

KENNEY

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