President George W. Bush and President Gloria Macapagal-Arroyo today reaffirmed the strength and warmth of bilateral relations and commemorated the 50th anniversary of the signing of the U.S.Philippine Mutual Defense Treaty. While celebrating the achievements of half a century of defense cooperation, the two Presidents agreed that the alliance remains vital to both nations, particularly in the wake of the September 11 attacks.

President Bush conveyed his deep appreciation for President Macapagal-Arroyo's leadership in the fight against terror, both within the southern Philippines and against international terrorist networks. He specifically noted with appreciation Philippine offers of logistical and other support to the coalition, as well as President Arroyo's efforts to forge a regional ASEAN approach to combating terror. President Bush also welcomed passage of new anti-money laundering legislation as a concrete step in the global effort against terrorism, and offered to provide technical assistance to help the Philippines effectively implement the new law. Emphasizing U.S. support for a strong, united ASEAN, President Bush further offered all appropriate assistance to help ASEAN improve its capacity to combat transnational threats, including terrorism and the illegal narcotics trade.

The two Presidents agreed that the war against terrorism should be fought in parallel with the war against poverty, and that the most effective and least-costly anti-poverty bilateral cooperation measure would be to work together to open markets worldwide. The two Presidents, therefore, resolved to work closely to expand trade bilaterally, regionally and globally, particularly in the context of the Doha Development Agenda. President Bush agreed to work with the United States Congress to provide the Philippines over $1 billion in Generalized System of Preferences (GSP) benefits. He also noted that the growth rate of quotas of U.S. imports of textiles and apparel from the Philippines would increase by 27 percent beginning in January 2002, in accordance with U.S. commitments to the WTO. The two leaders directed their Trade Ministers to reinvigorate and convene the U.S.?Philippine Trade and Investment Council within the first half of 2002.

Some long-standing issues are being resolved even before these missions, including approval of Philippine mangos for export to the United States. USDA and the Philippine Department of Agriculture further signed a Memorandum of Agreement on November 19 to renew and expand activities involving wide-ranging scientific, technological, and agribusiness cooperation. USDA will make available guarantee programs of $150 million for U.S. agricultural exports and equipment to the Philippines that support the modernization of Philippine agriculture and fisheries. Arrangements are also being made to provide up to $40 million in PL-480 food aid for fiscal year 2002, subject to budget allocations.

President Macapagal-Arroyo emphasized her government's commitment to fight poverty, accelerate economic reform, enhance transparency and promote good governance. In support of these objectives, President Bush announced that in addition to assistance for Mindanao, he is seeking $29 million from Congress in fiscal year 2002 monies to support poverty alleviation, economic growth, and anti-corruption efforts throughout the Philippines. As an expression of confidence in President Macapagal-Arroyo's strong leadership on economic reform, President Bush further announced that the Overseas Private Investment Corporation (OPIC) will extend a special line of credit of $200 million, building on its current substantial portfolio commitments for private sector investment in the Philippines, including in the housing sector. The two Presidents agreed to work to increase American investment in the Philippines, considering the close partnership between their countries.

The two Presidents affirmed their shared commitment to protecting the environment, pledging to continue the environmental activities, including technical cooperation, under the July 2000 Joint Statement of Cooperation on Environment and Public Health. President Bush also informed President Macapagal-Arroyo that the Philippines has been declared eligible to participate in debt treatment programs under the U.S. Tropical Forest Conservation Act (TFCA) of 1998. TFCA provides for the cancellation of a portion of concessional debt owed to the United States (which, in the case of the Philippines, currently totals approximately $430 million) in exchange for a commitment to make local currency payments to support domestic forest conservation activities.

The two Presidents discussed the situation in the southern Philippines, where separatist conflict and armed insurgency have raged for decades. President Bush and President Macapagal-Arroyo expressed deep concern for the safety of Philippine and American hostages held by the Abu Sayyaf Group (ASG) in the southern Philippines and called for their immediate and unconditional release. The two leaders reaffirmed their commitment to secure the safe return of all hostages and to put an end to the terrorist acts committed by the ASG.

They discussed the recent trip to the Philippines by a U.S. counterterrorism assistance team, which assessed the capabilities and needs of the Armed Forces of the Philippines (AFP) in their campaign against the ASG. The two leaders affirmed that they would continue to work on a vigorous, integrated plan to strengthen the Philippine security forces? capacity to combat terror and protect Philippine sovereignty. Such an integrated plan would include a robust training package, equipment needed for increased mobility, a maintenance program to enhance overall capabilities, specific targeted law enforcement and counterterrorism cooperation, and a new bilateral defense consultative mechanism. As a preliminary step to enhance Philippine military modernization, President Bush pledged to work with the Congress for at least a ten-fold increase in Foreign Military Financing (FMF), from $1.9 million to $19 million for fiscal year 2002, and to sustain heightened assistance levels in fiscal year 2003. He further announced his intent to provide an additional $10 million in Department of Defense goods and/or services to assist the Armed Forces of the Philippines and another $10 million to support counterterrorism and law enforcement assistance. In total, security assistance from the Bush Administration to the Macapagal-Arroyo Administration, offered and/or delivered, is expected to be worth nearly $100 million for fiscal years 2001-2002.

While pledging military cooperation to end the terrorist activities of the ASG, both leaders agreed that sustainable peace in Mindanao in the southern Philippines requires addressing Mindanao's root economic and social problems. President Bush praised President Macapagal-Arroyo's decision to pursue a political path to peace with the Moro Islamic Liberation Front (MILF) and welcomed the recent cease-fire signed between the MILF and the Government of the Philippines. To help consolidate the peace and to promote economic and social development in Muslim communities, President Bush announced that he is working with the United States Congress to more than double U.S. assistance to Mindanao with a fiscal year 2002 package worth over $38 million. Combined with fiscal year 2001 assistance, the United States will provide over $55 million to Mindanao.

This Mindanao Assistance Package will provide direct support for the nascent peace process by integrating the ex-combatants and their communities into the peacetime economy; creating an environment in Mindanao that is attractive for investment, job creation and economic progress; and providing improved public services in Mindanao, especially in the Autonomous Region of Muslim Mindanao. This package will also include $825,000 in new educational and cultural exchanges, including a number of Fulbright scholarship grants, specifically targeted at Mindanao's Muslim community. This represents an almost 90 percent increase in educational exchange programming for Mindanao. The President further committed to work with Congress and other donors to secure additional resources for Mindanao, as the peace process moves forward in the years ahead.

To complement this assistance, the U.S. Trade and Development Agency (TDA) is taking a pro-active approach to encourage the U.S. private sector's involvement in Mindanao's infrastructure development. Both Presidents welcome TDA's signing of a $302,500 grant agreement to plan the development of a commercially sustainable solar-powered irrigation system for rural farming communities and look forward to future TDA projects that will further promote sustainable development for the people of Mindanao.

President Bush expressed condolences for the victims of the severe typhoon that hit the Mindanao region earlier this month and noted that the United States contributed $100,000 in disaster relief assistance to help affected families. To help better prepare for, and respond to, future disasters, the two leaders welcomed the signing of a U.S.?Philippine protocol of intentions on cooperation on disaster prevention and management.

The meeting between President Bush and President Macapagal-Arroyo was characterized by unusual warmth and candor and heralded a new era of comprehensive cooperation and friendship between the United States and the Philippines.