(Editor’s Note: Following is the ninth in a series of backgrounders on Philippine-United States relations that the Presidential News Desk is issuing on the run-up to the state visit here of US President George W. Bush on October 18)

For fiscal year 2002, the composition and allocation of US Foreign Military Financing Assistance to the Philippines are as follow:

Foreign Military Financing Assistance to the Republic of the Philippines

Training (IMET) $2.0 M

Benefiting 146 students

(Editor’s Note: Following is the tenth in a series of backgrounders on Philippine-United States relations that the Presidential News Desk is issuing on the run-up to the state visit here of US President George W. Bush on October 18)

BAGUIO CITY–Education is not the only legacy Filipinos could thank America for. This city noted for its pines and cool climate is another.

The vision and governance of great American leaders and soldiers shaped this highland city to what Asians and Europeans consider to this date as a beautiful American legacy.

What this city looked like when Captain Robert R. Rudd, commander of the U.S. 48th Infantry, maintained a mountain post here in 1900 may be different now, but basically, this 49-square kilometer plateau remains in accordance with the comprehensive development plan of architect Daniel Burnham.

Although the American's plan for the city's maximum residents was 25,000 people, the Philippine government was able to conserve and protect the city's environs even as Baguio’s population has already swelled to almost half-a-million to date.

Burnham's development plan (now known as land use plan or town plan) dated back to 1904 when at that time Baguio’s population was composed of only 811 Igorots and 30 Ilocanos, according to the "The Skyland of the Philippines" by Laurence L. Wilson.

While it is true that Baguio only became a chartered city on September 1, 1909 by virtue of Act No. 19644, the American government (Philippine Commission) spent a few millions of pesos for this place, which the Americans dubbed as "Summer Capital of the Philippines" since 1900, being the recreation center of the U.S. Thirteenth Air Force.

In 1901, the Philippine Commission appropriated P75,000 for the opening of the Kennon Road. When this road was finished on Jan. 29, 1905, the American government had already spent a total of P2.05 million.

In 1903, the Americans built the city roads which to date are the main thoroughfares: Session, Gov. Pack, Leonard Wood, Harrison, Brent and others. Governor Cameron Forbes built the Mansion House, which has since become the official presidential house here.

Other American landmarks which have survived over a century now include the city hall, and the US Ambassador's residence - - the historical place where Japanese General Tomoyuki Yamashita formally surrendered after World War II.

The Americans also spent a lot for the education of the natives that the English language was extensively propagated in this highlands by the "Thomasites."

Earliest Baguio historians like Wilson recalled that to date, many American-educated residents still have fond memories of their teachers, specially the well-loved Alice Kelly.

They also built the Brent and Easter schools which to date are among the leading educational institutions in the country.

In 1905, Camp John Hay, a 1,718.55 acre-reservation, was built as an American recreation center. The Country Club was built earlier, in 1902. Both former American facilities are now world-class sports and tourism facilities. The yearly Fil-Am golf tournament at Camp John Hay attracts hundreds of amateur golfers.

With the advent of modern information technology, where most websites, whether government or private, have been using streaming media to enhance their interactivity with the internet users, the Office of the Press Secretary (OPS), through its website: http://www.ops.gov.ph, will show online US President George W. Bush’s visit to the Philippines on Saturday, October 18.

Thousands of Internet users not only in our country but also in the worldwide web will be able to monitor, in real time, President Bush’s visit through the OPS website.

The visit of President Bush, although brief, will affirm the two countries’ commitment to further strengthen their security, economic, trade and socio-cultural ties.

The program for the visit includes a welcome ceremony at the Palace grounds, signing of the Palace guest book, a one-on-one between the two Presidents, expanded bilateral talks and a state dinner in Malacanang.

The President noted that the present ratio of children to classroom in the Philippines is about 100 to 1. She said that the OFWs’ donation will go a long way not only in closing that gap but also in uplifting education in the country.

KUALA LUMPUR—The Committee of Eight of the Organization of Islamic Conference (OIC) has expressed satisfaction with the Philippines’ compliance with the terms of the 1996 peace agreement with the Moro National Liberation Front (MNLF), President Gloria Macapagal-Arroyo said yesterday.

Now she looks forward to also achieving a peace treaty with the Moro Islamic Liberation Front (MILF) and bring lasting peace and progress to Mindanao, the President told about 1,200 overseas Filipino workers (OFWs) at the Grand Ball Room of the Concord Hotel here Wednesday night.

The peace agreement with the MNLF may be the most successful undertaking of the OIC in its whole history, the President said after receiving the favorable report of the OIC’s Committee of Eight headed by Indonesian Foreign Minister Hassan Wriajuda that monitored the implementation of the treaty terms.

The President said that this gives her great hope that the Philippine government will be able to forge the same agreement with the MILF soon with the support of the OIC.

The President is here on invitation of outgoing Malaysian Prime Minister Mahathir Mohamad to attend the 10^th session of the OIC. Mahathir is chairman of the OIC that has a membership of 57 Islamic countries.

Mahathir has offered to broker and host negotiations between the Philippine government and the MILF.

The President also told the OFWs of her administration’s goal to change Philippine society to achieve economic development and eradicate poverty. She stressed the need to change Philippine economic and political systems, the way Mahathir did sparking the progress and development of Malaysia.

On top of system changes, the Philippines also needs to unify the wide rifts in society, the President said.

PUTRAJAYA—The 10th Session of the Organization of Islamic Conference (OIC) opened here today with Philippine President Gloria Macapagal-Arroyo in attendance, the first ever Filipino Chief Executive invited to attend the largest gathering of Muslim leaders around the world.

"This is the first time in the history of the OIC that a Philippine President is invited to its summit of 57 Islamic nations," the President said in a statement before the summit started.

"This is a real breakthrough in our foreign relations whether an observer status is granted to the Philippines or not," she said.

"The important thing is to maintain our close links with the Islamic nations as an integral part of our economic and political interests," the President added.

The President revealed her two-pronged missions in Kuala Lumpur: to gain broader support for peace and development in Mindanao, and for our fight against terrorism."

"Garnering OIC observer status is important to this agenda but it is not indispensable because our diplomatic inroads are already firm and in place. We have the support of many Islamic nations for our bid for observer status and we may win it. If not today, I am confident it will happen soon," the President stressed.

The Philippines' application to become an observer status of the influential OIC has been deferred for next year pending the resolution of some technical problem about "overlapping representation."

At present the Moro National Liberation Front (MNLF) is presently recognized as an observer status in the OIC, represented by Gov. Parouk Hussin of the Autonomous Region in Muslim Mindanao (ARMM).

"Because of this complication, the issue of observer status for all candidate countries may have to be passed on to the next OIC ministerial conference to be held in Istanbul, Turkey in 2004," Foreign Affairs Secretary Blas F. Ople said.

Aside from the Philippines, three other countries have applied for observer status in the OIC. These the Russian Federation, South Africa, and Ghana.

The 10th OIC summit is hosted by Malaysia.

For Malaysia, the summit is doubly significant as Prime Minister Dr Mahathir Mohamad steps down from office on October 31, ending 22 years of steering Malaysia into an emerging economic power in Southeast Asia.

Mahathir and his wife received Muslim and non-Muslim leaders, including the President attending the summit at the ultra modern Putrajaya Convention Center in the new City of Putrajaya, some 70 kilometers north of Kuala Lumpur.

More than 30 Muslim leaders are attending the summit.

Except for Egypt's President Hosni Mubarak, Libya's Muammar Ghaddafi and Palestinian President Yasser Arafat, almost every king, sultan, president and prime minister of Muslim countries are in attendance. Mahathir is heeding the call for a revitalized OIC, particularly on trade and business in conformity with the proven ethics of Islam by avoiding making others suffer.

While Mahathir recognizes the importance of making profits in business, it should not be made at the expense of others.

United States President George W. Bush will arrive on Saturday for an eight-hour state visit that is aimed at strengthening US bilateral relations with the Philippines and intensifying cooperation and partnership between the two countries in the fight against international terrorism.

On board the Air Force One and accompanied by US First Lady Laura Bush, Bush is expected to arrive in the country shortly after noon on Saturday. He will immediately proceed to Luneta for wreath-laying ceremonies at the Jose Rizal Monument.

Afterward, the American President will proceed to Malacanang, where President Gloria Macapagal-Arroyo, accompanied by First Gentleman Atty. Jose Miguel Arroyo, will formally welcome him. He will be accorded full military arrival honors at the Palace grounds.

Thereafter, Bush will sign the presidential guest book at the Malacanang Palace landing.

Right after the short ceremony, the two Presidents will have a meeting at the Study Room, followed by an expanded bilateral meeting at the State Dining Room.

The two leaders are expected to issue later on separate statements regarding the bilateral meetings, according to state visit’s designated spokesman Ambassador Victoriano Lecaros.

Meanwhile, Mrs. Bush and Atty. Arroyo will have a separate activity – a story-telling session with some 350 school children at the Palace’s Kalayaan Hall.

In the afternoon, Bush will address the joint session of the Philippine Congress at the Batasang Pambansa in Quezon City.

During a press briefing in Malacanang, Lecaros said it is expected that Bush will deliver a half-hour speech before the legislature that would delve on the two countries’ bilateral relations

Lecaros also noted that many expect Bush "to say something very significant for the region and he will enunciate it from out of here."

Bush will also have a meeting with Senate President Franklin Drilon, House Speaker Jose de Venecia and the respective heads of the majority and minority parties of both houses.

Later in the afternoon, Mr. and Mrs. Bush will return to Malacanang for a "barrio fiesta" cocktail reception at the Palace grounds.

In the evening, the President and First Gentleman will host the traditional state banquet for the American presidential couple at Malacanang’s Ceremonial Hall.

Bush is expected to depart Manila early Sunday morning.

During the press briefing in Malacanang, Ambassador Lecaros introduced Ms. Susan Ralston, a Filipino-American who works in the White House as executive assistant to Karl Rove, Senior Advisor to Bush.

"This goes to show that our relationship with United States transcends or permeates so many levels," Lecaros said.

President Macapagal-Arroyo has said that the Filipino people will make every effort to make President Bush’ stay, however short, both meaningful and memorable.

"Security preparations are in place and we are ready to give him a rousing welcome deserving of a friend and ally of the Philippines.

Mrs. Macapagal-Arroyo has also noted that Bush’s state visit heralds a new chapter in Philippine-U.S. trade relations with the expected huge influx of new business and investment opportunities between the two countries.

KUALA LUMPUR—President Gloria Macapagal-Arroyo has extolled here today the business acumen of a former Filipino domestic worker in Malaysia who invested her hard-earned money wisely to become a successful businesswoman in Davao City.

The President, who is here to attend the opening of the 10th Session of the Islamic Summit conference, urged the 600,000-strong overseas Filipino workers (OFWs) in Malaysia to follow the footstep of Ms. Dolly Sumampong who saved her earnings and went into business back home.

Sumampong put up her own laundry business in Davao City in 2001. The business venture flourished almost overnight as she supervised it properly.

From the profits she earned, the President, who laboriously followed the ladder of success of Sumampong, said that the Davao City lass, a daughter of a former domestic worker, also worked in Malaysia some years ago, branched out into restaurant business, specializing on roasted pig.

Sumampong's twin business ventures have flourished the past three years, the President told her audience, mostly Filipino workers, during a program they tendered for the visiting Filipino leader which they dubbed as "An Evening with the President."

The President was so inspired of Sumampong's success that she called on the eight million OFWs to invest their money in their homeland.

She paid tribute to the OFWs who have helped breathe life to the Philippines in times of crisis by sending their dollars back home.

The bulk of Filipino workers are in the United States with over three million there. This is followed by Saudi Arabia with more than one million.

The third largest is in Malaysia with over 600,000, 17,000 of whom are in Kuala Lumpur.

The President said she was aware that many OFWs have bought PAG-IBIG houses for their loved ones.

The Chief Executive was also amazed at the OFWs in Kuala Lumpur who responded to the call of the Philippine government to save by putting up a group they dubbed as "Samahang Impok Bayan (SIB).

The SIB has so far saved 204,000 Malaysian ringgits or equivalent to over three million pesos, which Jess Espanto and Ms. Teresa Guanzon-Hayward, the evening's masters of ceremony, are ready for investment for small business enterprises, not in Malaysia but in the Philippines.

The Filipino Community Association in Malaysia had earlier pledged to donate P3.6 million for the construction of 18 classrooms in the Philippines in areas they are most needed.

Tourism Secretary Richard Gordon today said the extortion charges made by the German airport operator Fraport AG against three Malacanang officials before an international arbitration tribunal smack of political blackmail "because we are a developing country."

Gordon, who is a member of the three-man Cabinet oversight committee on the NAIA Terminal III directed to make an exploratory talks with the Philippine International Air Terminals Co. Inc. (PIATCO) concession for the early opening of the airport, said he is upset with the timing of the release of the so-called announcements.

"We have a special guest coming in here and this comes also in the heels of the announcement of the President that she is running for presidential election in 2004," Gordon said.

Gordon pointed out that "this smacks of bad faith on the part of Fraport. "Why should they be alleging that there will be no compensation when in fact we were talking about the parameters about a just compensation," Gordon said.

In a statement, President Gloria Macapagal-Arroyo said she welcomes the arbitration case filed by Fraport against lawyer Arthur "Pancho" Villaraza and two other Malacanang officials.

"We welcome the arbitration case filed by Fraport with the World Bank because it will clear the air before the international business community once and for all," the President said.

The President also expressed support for a Senate inquiry into the accusation of former Fraport Chairman Wilhelm Bender and vice chairman Manfred Scholch on the alleged extortion attempt by Villaraza.

"If the Philippine Senate wants to undertake its own investigation of alleged extortion charges, well and good. We have nothing to hide and there will be no coddling of anyone," the President stated.

Last Nov. 29, 2002, the President has declared null and void the contracts granted to PIATCO.

Deputy Presidential Spokesman Ricardo Saludo, during a press briefing, said that the President’s statements regarding the controversy will not prejudice the case because her statements were based on the actual actions of Climaco and Cruz.

"What President Arroyo said is an expression of a view with regard to the actual actions of these individuals in prosecuting the case," Saludo said.

Chief Presidential Legal Councel (CPLC) Avelino J. Cruz, Jr. today categorically denied for being "false and malicious" the allegations of Fraport AG appearing in the headline story of the Philippine Daily Inquirer issue of October 15 that he and former Presidential Adviser on Strategic Projects Gloria Tan-Climaco purportedly "made clear to Fraport that the government would not permit the NAIA Terminal 3 investment to be successful as long as the Cheng family played a central role."

Cruz said that in the three meetings with Frafort officials that he attended with several Cabinet members, the Cabinet members including himself consistently took the position that whatever problems that might exist between Fraport and their Filipino co-stockholders in Philippine International Air Terminals Co. Inc. (PIATCO), including the Chengs, were private intra-corporate matters in which the government should not and would not intervene.

On the allegation that the nullification of the PIATCO contracts was "Fraport’s ultimate punishment for failing to abide by the government’s unlawful demands," Cruz said that the government never made any unlawful demands.

"The petition for the nullity of the Piatco contracts were filed with the Supreme Court by private individuals and members of Congress. The Department of Justice and the Office of the Solicitor General rendered opinions that the PIATCO contracts were null and void, for which reason they cannot be legally implemented."

Cruz said that the Office of the Chief Presidential Legal Counsel merely concurred with these findings. "These served as basis for the government’s position on the issue of the validity of the PIATCO contracts," he said.