Cablegate: Ambassador's Visit Highlights Cebu's Bright Horizons

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RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHML #3419/01 2881106
ZNR UUUUU ZZH
R 151106Z OCT 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC 8598
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RUCPDOC/USDOC WASHDC
RHHMUNA/CDRUSPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 MANILA 003419

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PREL KPAO BTIO ECON MARR RP
SUBJECT: AMBASSADOR'S VISIT HIGHLIGHTS CEBU'S BRIGHT HORIZONS

REFS: A) Manila 561 B) 06 Manila 2389

1. SUMMARY: The Ambassador's October 4 visit to Cebu highlighted
the opportunity the vital role American businesses play in the
commercial life of the Philippines' second city. Buttressed by a
live television interview and a roundtable with print media business
editors, the Ambassador opened an "American Showcase" exhibition of
U.S. products and services, toured a milling company that uses
American wheat, spoke to the local American Chamber of Commerce
about the impact of U.S. businesses, and inaugurated a family health
center at the subsidiary of an American market research firm. The
Ambassador also called on the Central Command of the Armed Forces of
the Philippines, whose commander provided an overview of the
priorities and challenges within his area of responsibility. As
they did during the Ambassador's visits to Cebu in February 2007 and
June 2006 (reftels), Cebu's prospects in both the commercial and
military spheres appear bright. End summary.

THE SECOND CITY
--------------------------

2. With a population of 3.36 million persons (according to the 2000
census), Cebu is the Philippines' second-largest city. Owing to its
location in the resort-rich Visayas island group, Cebu boasts more
international airline connections than Manila. Its seaport, the
country's busiest, captures the lion's share of Filipino shipping,
and a pro-business local government has in recent years extended tax
abatements and other inducements to international businesses such as
call centers and electronic-component assembly plants. Locals point
with pride to nearly five centuries of Christianity and trade with
the West (opened by Magellan, who was killed near Cebu), reasonably
orderly traffic, relatively modest pollution, and a can-do spirit of
workers here as evidence that-akin to the Hertz rental car "we try
harder" advertisements of years past-they embrace the challenge of
living in Manila's shadow.

LOCAL MEDIA HOSTS AMBASSADOR
--------------------------------------------- -------

3. Appearing for an October 4 live interview on the local
equivalent of "Good Morning America," the Ambassador spoke directly
to the residents of the greater Visayas region about the reasons for
her visit to Cebu. She identified commerce as the engine propelling
the fastest-growing economy in the Philippines and noted that the
city has proven receptive to U.S.-Philippine investment and business
partnerships. Her hosts lauded the Ambassador's inauguration of the
FCS-sponsored "American Showcase" exhibition at a local hotel later
that day, wherein the products and services of 16 U.S. companies
were highlighted. At breakfast afterwards with four Cebu-based
business editors, the Ambassador praised the city's pro-business
climate and reiterated the importance to continued economic growth
in the Visayas region of opportunities such as those represented by
the "American Showcase."

SHOWCASING SUCCESS
---------------------------------

4. The centerpiece of the Ambassador's visit to Cebu was a
ribbon-cutting ceremony opening the FCS-sponsored "American
Showcase" exhibition of 16 brands from 14 U.S. firms. These
firms-including such names as Ford, Kraft, Citibank and
Goodyear-came with the goal of highlighting a positive American
"brand-name" outside of metropolitan Manila. The Ambassador
stressed the diversity of U.S. businesses seeking partnerships in
Cebu and the determination American firms have shown in expanding
beyond Manila. Both themes resonated with an energetic,
full-to-capacity crowd eager to increase partnerships with U.S.
corporations.

DIVERSITY AND DETERMINATION
--------------------------------------------- ---

5. A tour of the General Milling Company (GMC) complex on nearby
Mactan Island reinforced the diverse nature of the American presence
in local businesses. A family establishment that has grown from a
single mill to a 17-hectare, vertically-integrated agribusiness
empire, GMC produces flour, animal feeds, yeast, and consumer goods
such as pastas and edible oils. Afterwards, at a luncheon hosted by
the American Chamber of Commerce-Cebu, the Ambassador spoke on the
subject "Faces of American Business in the Philippines," framing for
the Chamber's 80 members and guests the key elements underpinning a
viable bilateral business roadmap. The Ambassador observed that few
partnerships come close to embodying such tremendous potential for
growth.

CORPORATE RESPONSIBILITY
------------------------------------------

6. The Ambassador's visit to the Western WATS data collection

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facility focused attention on a fact that American corporations have
long recognized: providing for worker welfare is critical to
ensuring the health of businesses and the communities in which they
reside. The Utah-based Western WATS established operations near
Cebu in 2003, with 1,300 full-time workers; its family health
center-established with USAID assistance--serves as a model of
corporate responsibility in the Philippines. After being briefed on
the center's pioneering, on-line reproductive health information
portal, the Ambassador officially launched the site.

REINFORCING MILITARY TIES
-------------------------------------------

7. Later in the day, the Ambassador met with Maj. Gen. Victor
Ibrado and his senior staff at Armed Forces of the Philippines (AFP)
Central Command headquarters. Ibrado emphasized the armed forces'
focus on humanitarian efforts by highlighting civil-military
projects throughout Central Command's area of operations, reporting
that it has been the key to success against communist insurgents.
He added, however, that both the Samar and Negros Oriental provinces
still suffered from extreme poverty, making them isolated hotbeds of
activity for the New People's Army (NPA). Ibrado noted the utility
of U.S. ship visits in promoting goodwill and said that future
visits could be tied to civil-military operations such as medical or
engineering civil action plans. He and his staff thanked the
Ambassador for the recent delivery of ten UH-1 helicopters and for
ten more planned for 2008 delivery.

COMMENT
----------------

8. The Ambassador's visit revealed high levels of interest in
increasing American business presence in Cebu, with industrial
icons-as well as lesser-known companies and start-ups-enjoying
remarkable market acceptance. Cebuanos have focused on forging a
distinct "brand" to attract positive attention and investment.
Buoyed by a booming economy and heartened by the AFP's success in
addressing the regional terrorist threat, residents of the
Philippines "second city" have good reason for optimism about the
future.

KENNEY

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