365. Telegram From the Department of State to the Embassy in the Philippines 1

1144. Joint State–Defense message. Department and Defense have completed extensive review Olongapo situation, including study your recommendations, have concluded we cannot agree Philippine control of town or its removal at US expense. Aware possible political implications our position but believe they do not warrant endangering security our major Naval area in South Pacific, heavy expense to US required or creation dangerous precedent Philippine control our base areas. Believe our position reasonable and will be accepted when fully understood by public despite misrepresentation Chronicle [Page 612] and others. Suggest your reply to Neri,2 which we assume he will publish, include following points:

US has no desire maintain any civil community within perimeter its military installations. In addition obvious political complications involved existence such communities create grave problems in terms basic requirements effective operation military installations, particularly in fields security and health.
In Olongapo US faced with situation in which community grew up under circumstances for which we in no way responsible. So long as community exists within Subie Reservation its administration must be subject to overriding military operating requirements substance of which established by 1947 Bases Agreement.
While physical removal Olongapo to site outside Reservation would represent ideal solution practical difficulties involved make this unfeasible. We cannot expend funds this purpose but would of course not object to Philippines undertaking project provided clearly understood they must handle high costs involved.
Fencing off area also impracticable. Cost excessive, fence not effective as security measure and would in effect bisect base.
Outright turnover town administration to Philippines incompatible with basic US military requirements although increased measure participation local inhabitants in municipal government desirable and may prove feasible after further study which in progress. Point is US must retain control all elements town administration which likely affect or impinge on our effective operation of installation.
Philippines should recognize circumstances make continuation present basic situation inevitable for immediately foreseeable future. We do not wish usurp in any way Philippine sovereign prerogatives which are fully recognized. Question is how to work out practical means handling existing situation within terms previously agreed arrangements for establishment and maintenance US bases on Philippine territory for common defense.
Numerous measures can and will be taken within framework preceding considerations improve conditions Olongapo. Some will be taken now, others later after further study by higher headquarters recommendations COMPHILCOM Board review. Many of latter will be dependent on extent funds available.
Measures already taken improve administration indicated COMPHILCOM 220914Z July, CNO 021353Z September, and CINCPACFLT 040042Z September.3 COMPHILCOM is taking action his 260157Z September.4

Regarding paragraph 3 if Philippines wish relocate town outside Reservation and desire make study to determine suitable location we would be glad cooperate and assist in any such survey within limits [Page 613] local US capabilities and with understanding new site and facilities would have to be acquired entirely at Philippine expense. If such study resulted selection and acquisition new site by Philippines, which believed unlikely, we also prepared to extent funds available assist in measures designed to encourage (but not force) resettlement those Olongapo residents who might wish move voluntarily, at same time taking measures limit further increase of non-US personnel at Olongapo.

Suggest your reply to Neri include in detail measures cited paragraph 8 as well as statement we anticipate further improvements as result review Navy Board’s report which now in progress.

To secure maximum public effect foregoing position suggest you consider providing full and frank briefing friendly correspondents and consider desirability releasing text your reply when delivered to Neri or shortly thereafter.

  1. Source: Department of State, Central Files, 711.56396/9–2855. Secret. Drafted in PSA and OSD, cleared by Admiral Davis (in draft) and Sebald, and approved by Robertson. Passed to COMNAVPHIL and repeated to CINCPAC.
  2. On August 17, Neri wrote a letter to Ambassador Ferguson, which explained the Philippine Government’s position in the Olongapo case. (Ibid., 711.56396/8–1755)
  3. None printed.
  4. This telegram of September 26 to CNO listed 19 specific steps that had been taken to help defuse the Olongapo controversy. (Department of Defense, OASD/ISA Files, FMRA Records, Philippines)