The assistance given to the Philippines by the United States Agency for International Development (USAID) is organized in four strategic areas although it has focused on the Muslim separatist movement in Mindanao since fighting started anew early in 2000 and the terrorist attack on the US, particularly New York, on Sept. 11, 2001.

In efforts to bring permanent peace in Mindanao and to reduce the potential for it to become a source of recruits for terrorist organizations, the USAID is the principal partner of the Philippine government in achieving this goal.

Toward these ends, USAID supports the integration of former rebels and their communities into the peacetime economy, improving economic infrastructure in conflict-afflicted areas, accelerating economic and business development of Mindanao, increasing access to micro-finance services, and expanding educational opportunities for disadvantaged groups.

Thus, in 2002, 8,000 former rebels have established themselves as small-scale commercial farmers who now make a living for themselves and their families with USAID assistance. This raised to 21,000 the number of former rebels from 25,000 identified as worthy of assistance.

The important thing about the visit of US President George W. Bush is the strengthening of the strategic relationship of the Philippines with the United States and the attendant objective of global peace and development in the region, Malacaņang said today.

The visit of President Bush is a good sign that the Philippines and the United States are one in the fight against terrorism and poverty, Presidential Spokesman Ignacio Bunye said in his regular radio interview this morning.

"The important thing is we are able to strengthen our economic partnership, security partnership and our long term friendship and mutuality," Bunye said as in answer to a question on the material benefits that will come with the visit of Bush.

Bunye emphasized that the RP-US relationship is no longer that between colonizer and colonized. "We are at a new level of partnership where we are allies in the world," Bunye said.

The United States remains the country’s number one trading partner and one of the biggest sources of official development assistance and with the declaration that the Philippines is now a major non-NATO ally, the country will probably get first priority in military assistance, Bunye said.

Bunye also said not to expect Bush to endorse the candidacy of President Gloria Macapagal-Arroyo in the May 2004 elections.

"It is not proper for a visitor or a foreign head of state to meddle in our purely internal affairs," Bunye said.

The United States government, which donated $1 million (P55 million) worth of modern hospital equipment to the Veterans Memorial Medical Center in 2002, is now clearing the way for another grant of $1 million to VMMC.

The Philippine Veterans Affairs Office (PVAO) reported to Defense Secretary Eduardo R. Ermita that the second tranche of the equipment aid is ready for delivery early next year to VMMC through the Manila office of the US Department of Veterans Affairs (USDVA).

US assistance to the state-run VMMC was part of the aid commitments secured by President Gloria Macapagal-Arroyo from the U.S. Several veterans groups in the U.S. have called for more benefits to Filipino veterans who had fought along side the American forces during World War II.

Last year’s $1 million grant infused into VMMC at least 58 units of state-of-the-art equipment, including 10 dialysis and 13 ventilator machines, that have boosted the capacity of the hospital in general and in geriatric medicine. With the U.S. grant, VMMC was able to set up a modern Dialysis Center, which U.S. Ambassador to the Philippines Francis Ricciardone inaugurated last April.

For 2003, the $1 million package will include 26 units of diagnostics and radiology equipment.

According to PVAO, U.S. assistance to the hospital, which averaged $2.5 million a year when the Philippines was hosting US military bases, stopped in 1994, but resumed in 2002 following the spirited efforts by the Macapagal-Arroyo administration to restore US assistance.

Former Philippine Ambassador to Nigeria Datu HJ Abul Khayr Alonto said the leaders of Muslim Mindanao look forward to the visit of US President George W. Bush on Saturday as he called for a political ceasefire to allow the government to properly prepare for the brief state visit.

In a statement, Alonto said the friendship between the Philippines and the United States and the combined efforts of the two countries’ leaders resulted in remarkable changes in several communities in Mindanao. "We appreciate the continuous flow of aid and technical assistance to several conflict-ridden areas in Mindanao. Because of this, there is a rising tide of hope among our poorest communities," he said.

The former MNLF leader said attempts of the opposition to diminish the significance of the forthcoming visit of President Bush by linking it to the 2004 elections reveal a great disregard for the needs of the people in Mindanao.

He cited the electrification of 160 rural villages, building of ports, agricultural and other livelihood grants as well as educational programs for the poor as important gains from the RP-US partnership.

The US Agency for International Development (USAID) has focused most of its grants to the Philippines on Mindanao to help integrate former rebels and their communities into the peacetime economy, improve economic infrastructure in conflict-afflicted areas, accelerate economic and business development in the area, increase access to micro-finance services and expand educational opportunities for disadvantaged groups.

This year, more than half of USAID’s programmed grants worth $70 million will be for Mindanao, particularly in the former conflict areas.

The US Institute for Peace also pledged generous grants for the Mindanao area as soon as the government and the Moro Islamic Liberation Front reach a peace treaty.

Alonto said that the good bilateral relations between the two countries "should not be dragged through the mud by warring factions" as he cited baseless reports about exorbitant spending and abusive US security personnel as examples of constant sniping by the opposition.

The Muslim leader said a political ceasefire would enable the country to properly prepare for the visit.

"Let us endeavor to welcome with respect and appreciation the leader of the United States because he has proven to be a steadfast friend and a reliable ally during these difficult times," Alonto said, adding that major investors and members of the foreign press would be accompanying President Bush to the Philippines.

Ambassador Alonto said Muslim communities in Mindanao who have yet to see the dawn of lasting peace in their lifetime could not afford another setback in the peace negotiations because of the machinations of some misguided elements.

The improved Philippine-United States trade relations will create a robust economy as bedrock of a strong Republic.

President Gloria Macapagal-Arroyo said that the new chapter in Philippine –US trade relations marked by US President George W. Bush’s visit to the Philippines this October 18^th could mean the start of the huge influx of new business and investment opportunities.

The President said that the blossoming of Philippine- US trade relations should be responsive to the new realities of the 21^st century which is characterized by globalization, technology change, and of great conjunction between security and development.

The President said that the US, by virtue of its dominant military and economic power, would continue to be an important factor in the affairs of the country and the entire region.

"The Philippines must harness its economic relations with the US for it to realize its goals in the area of bilateral trade by seeking fair trade—one that opens the US markets to Philippine products and one that will enhance development," the President said.

Accelerating the tempo of intensified bilateral interaction under the Bush-Arroyo administrations is the activation last April 2002 of the US- RP Trade and Investment Council.

To date, the Council has held two meeting to address business and investment issues to eliminate stumbling blocks to hasten economic cooperation.

The new chapter on RP-US bilateral relations kicks off with the US granting the Philippines $30 million in additional trade benefits under an expanded list of products approved for duty-free exportation to the US.

Likewise, the US will also give the Philippines an estimated $40 million commodity loan that will involve not only the transfer of money and food, but the transfer of knowledge as well.

Under this benefit, $40 million worth of high-quality American rice will be sold to the Philippines on concessional loan terms. The Department of Agriculture will sell the rice locally and use the proceeds to help finance agricultural development projects and programs that will mostly benefit the poor in Mindanao.

Also, the funds raised under such a commodity loan will help finance the training in the US of Filipino agriculturists under the Fulbright-DA exchange program.

It is also expected that the Philippines will receive especially large increases in benefits arising from the US’s favorable action on previous Philippine petitions for tuna, pineapple juice and fatty acids, including the Philippines’ fruit products under the 2003 Generalized System of Preferences (GPS).

Today, the US is the Philippines’ top economic partner in both trade and investment. Annual bilateral trade exceeds $18 billion and cumulative direct private investment is at $3.5 billion.

The US is also the top destination of Philippine exports and is the Philippines’ second source of imports. In 2002, two-way RP-US trade amounted to $15.06 billion. The Philippines continues to enjoy a favorable balance of trade with the US, registering a trade surplus of 42.30 billion last year.

In the investment arena, Central Bank figures show that US foreign direct investments (FDI) in the Philippines by the end of 2002 were valued at $3.3 billion or 22 percent of total FDI.

A testimony to the solid confidence of US companies in the Philippines, as an ideal investment destination is the American Chamber of Commerce’s roster of members. The roster lists at least 240 American companies engaged in business in the country.

Intel Technology Philippines is a major assembly and test site for Intel’s latest products such as Pentium 4 and Centrino microprocessors for mobile computing. Intel is fully committed in developing its Philippine site as a high-technology manufacturing facility.

Two out of three digital cellular phones used worldwide have a TI (Texas Instrument)- Philippines DSP chip that is produced locally by TI- Philippines, Inc. The firm has a workforce of 1,750 workers and continues to be the leader in digital telephony.

The Philippines also serves as the hub for the regional operations of giant US companies. Federal Express (Fedex) operates its Asian distribution system, known as ASIA ONE, from the Subic Bay International Airport and provides transport services to 30 countries in the Asia- Pacific market.

Fedex operates 260 flights per week, moving 3 million items in 211 countries.

Likewise, the Intra-Asia Hub of United Parcel Service (UPS) is strategically located at the Diosdado Macapagal International Airport in the Clark Economic Zone.

Even before President George W. Bush could set foot in the country, three projects in celebration of a century of Philippine - American collaboration in education were initiated today in the presence of President Gloria Macapagal-Arroyo.

Initiated at the historic Benito Legarda Elementary School in Sampaloc, Manila were the $33-million USAID education initiative, the Ambassador’s fund for cultural preservation and the launching of the English Language Proficiency program between the Makati Business Council and the American Chamber of Commerce. USAID refers to the United States Agency for International Development.

The granting of $33 million in assistance over six years to improve access to and the quality of education, particularly in the Autonomous Region in Muslim Mindanao (ARMM), was contained in a Memorandum of Intent signed between US Ambassador Francis Ricciardone and Socio-Economic Planning Secretary Romulo Neri in rites also attended by government and embassy officials.

In his brief remarks, Ricciardone traced the RP-US collaboration in education back to 1901 when American volunteer teachers, who came to be known as Thomasites, arrived in Manila to establish the public school system in the Philippines.

"The American-Philippine partnership in education stems from our appreciation of the value of education as a springboard to opportunity and the foundation necessary for civil society and democracy to flourish," Ricciardone said. "It is no surprise that President Bush has made education both a national priority and priority in our foreign policy."

During the same rites, Ricciardone also donated $30,000 to the National Historical Institute to preserve the historic structure and improve the facilities for current needs of the Legarda Elementary School.

The Legarda Elementary School is one of the earliest schools built in Manila in 1922 and highlights one of the most cherished legacies of the American period in the Philippines – the public school system.

The Ambassador’s Fund for Cultural preservation is the only cultural preservation program in the US government that provides direct small grant to preserve cultural or educational landmarks in less-developed countries.

Highlighting the affair was the signing of a Memorandum of Agreement between the Philippine-United States Business Council and the American Chamber of Commerce of the Philippines, Inc. agreeing to pursue a project for the enhancement of the English language.

The program is designed to improve the level of proficiency in English among teachers and students in both the formal and non-formal sectors.

It will involve training and certifying English teachers at the collegiate and secondary school levels using a blended approach of classroom teaching and computer-aided instruction.

The MOA was signed by Ramon del Rosario Jr., chairman of the RP-US Business Council and vice chairman of the Makati Business Club, and George Henefeld, president of the American Chamber of Commerce of the Philippines.

The program, which will run for an initial three years, envisions a total of 50 computerized English Language Centers with 250 teachers and 42,000 students trained and certified in that period.

Ricciardone said that President Bush approved both these major increase in American development assistance "because we listen carefully to Filipinos."

"And we’ve been listening all the more carefully since we discovered our common suffering at the hands of international terrorism," he said.

The United States government, which donated $1 million (P55 million) worth of modern hospital equipment to the Veterans Memorial Medical Center (VMMC) in 2002, is now clearing the way for another grant of $1 million to VMMC.

The Philippine Veterans Affairs Office (PVAO) reported to Defense Secretary Eduardo R. Ermita that the second tranche of the equipment aid is ready for delivery early next year to VMMC through the Manila office of the US Department of Veterans Affairs (USDVA).

US assistance to the state-run VMMC was part of the aid commitments secured by President Gloria Macapagal-Arroyo from the US during her state visit to Washington, D.C. last May. Several veterans groups in the U.S. have called for more benefits to Filipino veterans who had fought along side the American forces during World War II.

Last year’s $1 million grant infused into the VMMC at least 58 units of state-of-the-art equipment, including 10 dialysis and 13 ventilator machines, that have boosted the capacity of the hospital in general and in geriatric medicine.

With the US grant, VMMC was able to set up a modern Dialysis Center, which US Ambassador to the Philippines Francis Ricciardone inaugurated last April.

For 2003, the $1 million package will include 26 units of diagnostics and radiology equipment.

According to PVAO, US assistance to the hospital, which averaged $2.5 million a year when the Philippines was hosting US military bases, stopped in 1994, but resumed in 2002 following the spirited efforts by the Macapagal-Arroyo administration to restore US assistance.

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.

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.

United States President George W. Bush arrived today, at 12:37 P.M., for a state visit to the Philippines that affirms the new partnership for peace and development between the two countries.

President Bush flew aboard his official plane, Air Force 1, into Villamor Airbase of the Philippine Air Force in Pasay City.

Vice President Teofisto Guingona and Executive Secretary Alberto Romulo, together with US Ambassador to the Philippines Francis Ricciardone, went up the Air Force l to welcome President Bush and First Lady Laura Bush.

The US President’s official entourage included Andrew Card, Jr., White House Chief of Staff; Dr. Condoleezza Rice, National Security Adviser; James Kelly, Assistant Secretary, Bureau of East Asian and Pacific Affairs, Department of State; and James Moriarty, Senior Director for Asia Affairs, National Security Council.

President Bush and the First Lady boarded the presidential car, a bullet-proof black Cadillac limousine, for the wreath-laying ceremony at the monument in honor of the Philippine national hero, Dr. Jose M. Rizal, at the Luneta Park in Manila.

President Bush and his party made a brief stopover at the US Embassy, which is located on Roxas Blvd. along the way to the Rizal Monument.

Manila City Mayor Lito Atienza and his wife, Beng, were at the Rizal Monument to greet President Bush for the floral ceremony that lasted for about 10 minutes. After Mayor Atienza assisted him in placing the wreath at the foot of the monument, President Bush stood at attention in front of the Rizal statue, while taps was played by the Philippine Marine and Navy bands.

President Gloria Macapagal-Arroyo and First Gentleman Atty. Jose Miguel Arroyo gave President Bush and First Lady Laura a red carpet welcome upon their arrival at the Malacanang Garden. Members of the Macapagal-Arroyo Cabinet were also present.

President Bush was accorded full military honors at the Malacanang grounds. Presidents Macapagal-Arroyo and Bush reviewed the honor guards, a contingent from the Presidential Security Group dressed in colorful white and powder blue uniform. A 21-gun salute was fired in honor of the visiting American leader.

Afterwards, President Bush congratulated and thanked Maj. Noel Clement, chief of the Presidential Security Guard.

While walking to the Palace side-by-side with President Macapagal-Arroyo, President Bush stopped by a group of children, who were to give a performance for the US First Lady. Mrs. Macapagal-Arroyo spotted her granddaughter, Mikaela, in the crowd and mentioned this to Mr. Bush. President Bush picked Mikaela up, hugged her and kissed her.

Presidential granddaughter Mikaela Gloria Arroyo stole the show today during the welcome ceremony at Malacanang for visiting United States President George W. Bush.

Mikaela was among the elementary schoolchildren waving Philippine and American flags and cheering President and Mrs. Bush when President Gloria Macapagal-Arroyo took the opportunity to introduce her granddaughter to the American leader.

"This is my granddaughter Mikaela," she told President Bush.

Then and there, Bush picked her up and planted a grandfatherly kiss on Mikaela’s forehead.

Mikaela, wearing a light pink dress, gazed at President Bush and smiled pleasantly.

The schoolchildren, mostly coming from public schools around Metro Manila, were cheering the American presidential couple shortly after the arrival honors accorded to the foreign head of state.

President Bush was given full military honors at the Palace grounds after arriving at the country shortly after noon. He earlier laid a wreath at the Jose Rizal Monument in Luneta before proceeding to Malacanang.

Mikaela first stole the show during the President’s latest State of the Nation Address at a joint session of the Philippine Congress in Quezon City where Mrs. Macapagal-Arroyo introduced her grandchild to the public.

First Lady Laura Bush, meanwhile, surprisingly yielded to autograph requests from the schoolchildren.

Afterwards, Mrs. Bush had a storytelling session with schoolchildren from St. Scholastica’s College, San Beda College and Legarda Elementary School.

Agreeing that the US-Philippine partnership has taken on a new vitality and importance in the context of the global war on terrorism, Presidents George Bush and Gloria Macapagal-Arroyo focused their bilateral discussion at the Malacanang Study Room today on the security challenges facing the two countries.

Although the two heads of state noted with satisfaction that a number of terrorist killers have been brought to justice, they agreed that much work remains to be done in attacking terrorist organizations both globally and regionally.

President Bush praised President Macapagal-Arroyo’s courage and strength in confronting terrorism in the Philippines and in Southeast Asia, and expressed appreciation in particular for Philippine initiatives to improve and expand counter-terrorism cooperation.

He thanked the Philippine President for her leadership and cooperation with key partners in the Association of Southeast Asian Nations (ASEAN) to address the terrorist threats on a regional basis.

The two leaders agreed that such cooperation, particularly in the area of information sharing, is an essential component of the war on terrorism.

In recognition of the strength and vitality of the alliance, as well as its vital role in promoting regional security and combating global terrorism, Mr. Bush informed President Macapagal-Arroyo that he has designated the Philippines as a Major Non-NATO ally (MNNA).

The designation is expected to facilitate the modernization of the Armed Forces of the Philippines and strengthen the defense partnership of the two countries.

In keeping with their pledge during President Macapagal-Arroyo’s state visit to the United States last May to conduct a comprehensive security assessment, the two Presidents also reviewed and endorsed the findings of the 2003 Joint Defense Assessment (JDA) of the Armed Forces of the Philippines’ capabilities.

The purpose of the JDA is to assist the Philippine government in developing a defense program that will improve the ability of the Philippine military to respond to threats to Philippine security.

President Macapagal-Arroyo noted the determination of her government to move forward on an ambitious program of military reform, including increased allocation of resources to Philippine national defense.

President Bush committed to assist the Philippines in this effort.

President Gloria Macapagal- Arroyo said today that the Philippines and the United States have agreed not only to strengthen their partnership to counter terrorism but also to find ways to further strengthen trade relationship between their countries.

The US has granted an additional $30-million trade benefits under an expanded list of products approved for duty-free exportation to the US.

Moreover, the United States Agency for International Development (USAID) will give the Philippine government $33 million to help the later improve the quality of education in the Autonomous Region in Muslim Mindanao (ARMM).

President Macapagal-Arroyo said that the new six-year US initiative to strengthen education in the poorest areas in the Philippines, particularly in Mindanao, compliments her government’s efforts to uplift the MMDA communities and expand their access to education and training.

President Macapagal- Arroyo said that the visit of US President Bush goes beyond mere concerns over terrorism. "It is about the mutuality of Philippine and US interests in peace, security and economic development," she said.

President Bush commended President Macapagal-Arroyo for her steadfast leadership in pursuing economic reforms in the Philippines and welcomed her pledge to maintain her resolve in pursuing economic reforms in revenue collection, energy privatization and intellectual property rights protection.

Mr. Bush also praised President Macapagal-Arroyo’s determination to alleviate poverty and other socio-economic grievances that are too often exploited by terrorist organizations to recruit followers.

Presidents Bush and Macapagal-Arroyo concluded the US leader’s visit highlighted the "impressive gains" made in Philippine-US relations under their administrations and marked "another concrete step forward in the development of a modern and mature relationship between friends and equals."

First Gentleman Jose Miguel T. Arroyo joined United States First Lady Laura W. Bush in a story-telling session with 346 grade school students playing up the importance of learning and reading on their way to a higher level of education.

The US First Lady Laura Bush read the book "Panda Bear, Panda Bear, what do you see," by Bill Martin Jr and Eric Carle.

The children amusedly echoed the line "Panda Bear, Panda Bear, what do you see?" after the US First Lady. They were guided by Amcy Esteban, a grade two elementary teacher from Centex-Manila.

Everyone were so enthusiastic, including First Gentleman Arroyo, who sat at the front audience row, while the First Lady Bush read the Panda Bear story.

After the seven- minute story telling session, six grade school pupils recited their own narration of "The Bamboo Tree" story.

The First Lady was all smiles as she listened and watched the drama-dance presentation of the "Bamboo Tree" story.

After the drama-dance part, six students gave Mrs. Bush an anklung (a musical instrument), a tray, castanets, a basket, fish trap and flute, all made of bamboo.

A cultural presentation using bamboo props and musical instruments followed. A children’s rondalla played and students in native Filipino attire danced with bamboo props the Pasigin, Subil and Tinikling accompanied by other students playing the "angklung."

After the dance, a student presented more gifts to Mrs Bush -- a book on bamboo and a bamboo jewelry box -- and sang "Magandang Pilipinas" and "Mabuhay".

After the 40-minute session, Mrs. Bush posed for souvenir photos with the grade school dancers.

"Thank you very much! I will never forget this, these beautiful and wonderful performances of all the dancers, singers and all the musicians. I am so impressed," she told the participants.

United States President George W. Bush, who is currently on a state visit to the Philippines, today reminded the Filipino people "what a great leader President Gloria Macapagal-Arroyo is when it comes to fighting terrorism."

In their bilateral talks at the Malacanang Study Room, President Bush told President Macapagal-Arroyo, "You have been strong and stalwart, and that is what’s needed. I appreciate that very much. We want to continue to help you. I want to thank you for your vision in fighting for freedom."

President Macapagal-Arroyo thanked President Bush for the United States’ continued security assistance, which enhances the Philippine government’s means to defeat terrorism.

The President also expressed her appreciation to President Bush for the increased economic assistance to alleviate poverty and other socio-economic ills from which terrorism draws its strength.

Taking pride in the robust economic ties that bind the Philippines and the United States, President Macapagal-Arroyo said she witnessed the launching of Convergy’s, the largest customer can service company in the world, which, she said, is hiring 3,000 workers in its first year of operation in the country.

The President said she also witnessed the launching of the new $50- million expansion program of Ford Motor Company that will make the Philippines as an auto export hub in Southeast Asia.

President Gloria Macapagal-Arroyo warmly welcomed President George W. Bush to Malacanang today for the first State Visit of an American President to Manila in over 30 years. As the two Presidents highlighted during President Macapagal-Arroyo’s State Visit to the United States last May, the ties between the Philippine and American peoples are deeply rooted in shared history and values, as well as in a shared commitment to global peace, security and prosperity.

President Macapagal-Arroyo expressed her appreciation for the support extended by President Bush to the Veteran Equity bills pending in both houses of the U.S. Congress, designed to enhance benefits for Filipino veterans of World War II residing in the United States. Both Presidents noted that the American and Filipino fighting men of World War II remain a strong bond between the peoples of both nations. President Bush announced the doubling of U.S. funding for medical equipment at the Veterans Medical Center in Quezon City. President Bush highlighted his respect for the impressive contributions of Filipino-Americans to American social, cultural and economic life.

The two Presidents focused their discussion on the security challenges facing the United States and the Philippines, agreeing that the U.S.-Philippine partnership has taken on new vitality and importance in the context of the global war on terrorism. Presidents Macapagal-Arroyo and Bush reviewed recent successes in the war on terrorism, noting with satisfaction that a number of terrorist killers have been brought to justice. They agreed that while progress had been made in attacking terrorist organizations both globally and regionally, much work remains to be done.

President Bush praised President Macapagal-Arroyo’s courage and strength in confronting terrorism in the Philippines and in Southeast Asia. He expressed particular appreciation for Philippine initiatives to improve and expand international counterterrorism cooperation and thanked President Macapagal-Arroyo for her leadership working with key ASEAN partners to address the terrorist threat on a regional basis. The two leaders agreed that such cooperation, particularly in the area of information sharing, is an essential component of the war on terrorism.

In recognition of the strength and vitality of the alliance, as well as its vital role in promoting regional security and combating global terrorism, President Bush informed President Macapagal-Arroyo that he had designated the Philippines as a Major Non-NATO Ally (MNNA). President Macapagal-Arroyo thanked President Bush for this honor and expressed hope that this move would facilitate the modernization of the Philippine Armed Forces and the strengthening of our defense partnership.

In keeping with their May 19 pledge to conduct a comprehensive security assessment, the two Presidents also reviewed and endorsed the findings of the 2003 Joint Defense Assessment (JDA) of the Armed Forces of the Philippines’ capabilities and requirements. The purpose of the JDA is to assist the government of the Philippines in developing a defense program that will improve the ability of the Philippine military to respond to threats to Philippine security.

President Arroyo noted the determination of her government to move forward on an ambitious program of military reform, including increased allocation of resources to Philippine national defense. President Bush committed to assist the Philippines in this effort.

The two Presidents agreed that their respective defense establishments would embark on a multi-year plan to implement the key recommendations of the Joint Defense Assessment. They agreed to direct their defense establishment to finalize details of the plan and begin its implementation.

President Macapagal-Arroyo welcomed substantial new US programs of law enforcement training, equipment, and expertise in support of her efforts to strengthen the rule of law and to reform and strengthen the Philippine National Police and other law enforcement agencies.

President Bush commended President Gloria Macapagal-Arroyo for her steadfast leadership in pursuing economic reforms in the Philippines and welcomed her pledge to maintain resolve in pursuing reforms in revenue collection, energy privatization and intellectual property rights protection.

President Bush praised President Macapagal-Arroyo’s determination to alleviate poverty and other socio-economic grievances that are too often exploited by terrorist organizations to recruit followers. President Arroyo welcomed the new, six-year U.S. initiative to strengthen education in the poorest areas of the Philippines, particularly Mindanao, as supportive of her efforts. This new program complements the Philippine government’s efforts to uplift the communities in the Autonomous Region of Muslim Mindanao (ARMM) and expand their access to education and training.

The two Presidents discussed the Philippine government’s efforts to establish a durable effective peace with the Moro Islamic Liberation Front (MILF). They expressed appreciation for Malaysia’s role in facilitating the negotiating process. President Bush emphasized US willingness to provide diplomatic and financial assistance in support of peace but emphasized that the MILF must first fully renounce terror and demonstrate its commitment to peaceful political negotiations.

President Macapagal-Arroyo and Bush discussed the situation in Iraq. The two leaders reiterated their shared commitment to a free Iraq at peace with its neighbors and expressed unwavering determination to continue the important work of helping the Iraqi people build a stable, just and prosperous country that poses no threat to the world. President Bush thanked President Macapagal-Arroyo for the contributions made by the Philippines to security and reconstruction in Iraq. The two President’s affirmed the vital role of the United Nations in postwar Iraq and stressed the need for more countries to contribute peacekeeping and humanitarian contingents to Iraq as that country prepares for sovereignty under a democratic regime.

The two leaders welcomed the six-party talks in Beijing and reiterated their intention to work with other members of the Asia-Pacific region to ensure the complete, verifiable and reversible elimination of North Korea’s nuclear weapons program.

President Bush congratulated the Philippines on its nomination by Asian countries to join the United Nations Security Council and expressed confidence that the Philippines would contribute to global peace and security.