For help in fight vs terrorism, US to endorse debt relief for RP

The US may help ease the massive debt burden of the Philippines as part of a reward aid package for its swift response to the call for a campaign against terrorism.

James Kelly, US assistant secretary of state for East Asian and Pacific affairs, has indicated Washington would consider helping the Philippines reschedule its more than $50-billion debt.

Kelly spoke with reporters at the US Embassy in Manila in a video link from Washington Friday night, ahead of President Arroyo’s meeting with President George W. Bush at the White House on Tuesday.

President Arroyo was among the first world leaders to declare support for the US-led campaign against Osama bin Laden, suspected mastermind of the Sept. 11 terror attacks, and his Taliban hosts.

Mrs. Arroyo, who is on her first official visit to the US since becoming President in January, had allowed US military vessels and aircraft to transit through the Philippines on their way to Afghanistan.

Kelly was asked if the Philippines could expect debt relief and concessions similar to those given to Pakistan, on which the US-led coalition counted heavily in toppling the Taliban regime.

On debt rescheduling, he said: "If this is something that the Philippine government needs and wants, it certainly is going to be given very careful consideration."

Finance Secretary Jose Isidro Camacho earlier indicated that the Philippines was unlikely to seek Pakistan-style relief and was more interested in attracting new capital.

After the Sept. 11 attacks, Washington had approved of a $600-million package for Pakistan and later agreed to reschedule $375.4 million dollars of debt.

However, Kelly indicated the Philippines should not expect any writing off of debt.

"I don’t think Pakistan’s debts were forgiven. There were some delays in the payment," he said.

According to the Bangko Sentral ng Pilipinas, government agencies and government-owned and -controlled corporations account for 64 percent of the country’s total debt. A key component of the Arroyo administration’s 2002 budget is the defense allocation to help restore law and order in Mindanao.

The President has asked Congress for a 31 percent increase in next year’s defense budget to $1.4 billion, including money to upgrade equipment to fight the Abu Sayyaf bandit group.

No US campaign vs Abu Sayyaf

Kelly said the US would not lead a campaign against the Abu Sayyaf similar to the operations to hunt down Bin Laden and destroy his al-Qaeda terrorist network in Afghanistan.

"At this time, this (Abu Sayyaf) threat seems to me to be within the capabilities of the Philippine military and the police. The attacks have all been within the territory of the country so I don’t think there will be any need (for US-led operations)," he said.

The US official likewise downplayed speculation that the President would receive US weaponry to help combat the Abu Sayyaf.

"The war against terrorism has many components. I’m not sure frankly whether heavy artillery, fighter aircraft, bombers are necessarily the only solutions to the problem," Kelly said.

He pointed out, however, that military training would be the key part of assistance to the Philippines.

"The software part is as important and perhaps more so than hardware," he said. "This is seen now in Afghanistan and we also see this for Basilan."

Last month, a group of US military consultants visited Basilan and Zamboanga City to provide training and gauge the requirements of the Armed Forces of the Philippines.

A report by US Pacific commander-in-chief Admiral Dennis Blair on his recent visit to the Philippines will be taken up during talks between Mrs. Arroyo and Bush. – Pia Lee-Brago, Jose Rodel Clapano