PHILIPPINE IG - REVISED DRAFT OF THE ELEMENTS OF CONSENSUS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86M00886R000400010002-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: December 1, 2010
• Sequence Number: 2
• Publication Date: December 27, 1984
• Content Type: MEMO

EXECUTIVE SECRETARIAT
ROUTING SLIP
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Remarks
For throC% ^8500"15 s pirr-,sc and Iota
requaS1teE. by C03, today.
Executive Secretary
31 PC-- r1
Data
3637 (1081)
Declassified in Part - Sanitized Copy Approved for Release 2012/01/13: CIA-RDP86M00886R000400010002-8
 Declassified in Part - Sanitized Copy Approved for Release 2012/01/13: CIA-RDP86M00886R000400010002-8
L
TO:
8435122
United States Department of State
Washington, D.C.
20520
OVP -
Mr.
Donald P. Gregg
NSC -
Mr.
Robert Kimmitt
Agriculture -
Mr.
Raymond Lett
AID -
Mr.
Malcolm Butl
CIA
Defense -
COL
R. J. Affourtit
EXMIM Bank -
Mr.
William H. Draper
III
JCS -
LTC
,
Thomas O'Connell
OMB -
Mr.
Alton Keel
Treasury -
Mr.
Christopher Hicks
SUBJECT: Philippine IG - Revised Draft of the Elements of
Consensus.
Attached is a revised draft of the 'Elements of Consensus'
emerging from the Philippine NSSD. Bearing in mind that the
purpose of this exercise is to set policy lines rather than to
make budgetary commitments, the revised draft seeks to take
into account the problems voiced at the December 27 meeting by
OMB, Treasury and Agriculture. You are requested to phone your
agency's concurrence/comments on the revised draft of the
Secretariat staff (Hank Hendrickson or Sheila Lopez - 632-5804)
by COB December 31, 1984.
Charles Hill
Executive Secretary
 US goal is to preserve the stability of a key ally through
realization of the following objectives:
-- revitalization of democratic institutions;
-- exposing the economy--in particular the agricultural
sector--to the interplay of free market forces;
-- restoring professional, apolitical leadership to the
Philippine military to permit it to deal effectively
with the growing communist insurgency.
In moving toward this goal, we will be supporting an internal
agenda established by reformist elements within the Philippine
political process.
Bases-related assistance, while not explicitly conditioned
upon reform, should be managed in a manner that is consistent
with our policy objectives. The military component (MAP grants
and FMS credits) should concentrate on practical programs such
as logistics, maintenance, training, equipment for mobility and
communications, and civic action.
Economic assistance beyond the bases-related package,
including support for international financial institution
loans, will be explicitly conditioned upon:
-- US assessment of implementation and compliance with the
IMF program; and
-- a comprehensive program of structural economic reform,
promoted and monitored by active bilateral and
 multilateral policy dialogue.
The largest amount of external financial assistance is
provided by the IBRD and the ADB. Therefore, agreement on the
policy agenda and close coordination with those institutions is
a precondition for a successful policy dialogue with the
Philippine government. The objective is to ensure that
specific policy targets are being adhered to prior to approval
of new loans or disbursement against existing loans.
Assuming effective performance, non-bases-related bilateral
measures will include:
-- DA at $35-40 million annually;
-- every effort, contingent upon available resources, to
implement a new PL 480 Title I/III program of at least
$50 million per year in FYs 85 and 86
-- increased ESF;
-- review of the scheduled phase-out of PL 480 Title II;
-- reduced sugar duty on a MFN basis.
All proposals for new assistance will include benchmarks and
discreet but plain deadlines. Non-performance will trigger
reconsideration of non-bases-related assistance.
 Political objectives will be pursued through active public
and private diplomacy, including Presidential letters and
visits by administration officials, as needed. In order to
ensure that the US is reaching the new generation of future,
leaders, we will increase existing exchange programs.
We should offer for FY 86 an enhanced security assistance
program of $195 million, with $100 million in military aid
including the maximum possible MAP component and ESF maintained
at $95 million, contingent upon available resources. The
prospect of enhanced assistance will be used with the
Philippine leadership to promote reform. If the necessary
reforms are not forthcoming we will fall back to the levels and
mix of security assistance called for the by the bases-related
'best efforts' commitment.
 With clear evidence that the GOP is commited to
implementing a broad front of political and economic reforms,
including compliance with the IMF program, we would seek to
move quickly on significantly enhanced bilateral and
multilateral economic assistance. Based on currently
anticipated requirements, and contingent upon available
resources, recent bilateral donor support levels averaging $450
million per year might be increased by three-quarters with the
total US portion in the $300-350 million range. We would also
support properly conditioned GOP requests for additional World
c
Bank and ADB loans which are consistent with their lending;
policies and practices and resource availabilities. Based on
donor estimates of needs, such lending might rise from present
levels of about $650 million per year to about $1 billion.
Assistance would be tranched and linked to performance on the
needed political and economic reforms.