307. Paper Prepared by the Interagency Group on Philippine Base Negotiations1



For the last several years, the Philippines have increasingly questioned the value of their defense relationship with the United States. They feel the U.S. does not help them with their main security concerns—the Muslim rebellion in the South and the protection of the disputed Spratly Islands—and that we have inadequately compensated them for our use of the bases at Clark and Subic. They have approached these concerns by focusing on the inadequacies of the Mutual Defense Treaty and the demanding negotiation of a new Military Bases Agreement.

In November 1975 President Ford and President Marcos agreed to proceed with negotiations in accordance with principles that would respect Philippine sovereignty over the bases without hampering the operational effectiveness of U.S. forces.2 Negotiating efforts reached an impasse at the end of 1976. Twenty-five issues having to do with base operating rights remained unresolved and the GOP rejected our offer of $500 million in MAP grants and FMS credits over a five-year period.

The causes of this impasse and our stake in the base negotiations were reviewed by the Policy Review Committee (PRC) in April 1977.3 The PRC confirmed the value of the bases but adopted a “wait and see” attitude toward renewal of negotiations. It also initiated studies of our Treaty commitment, our military profile at Clark and Subic, steps we could take to enhance benefits of the bases for Filipinos, and a new compensation package.4

In August Marcos delivered an Aide Memoire demanding immediate negotiations of a new bases agreement.5 Since then we have seen [Page 1009] a significant shift in the Philippine approach to the negotiations and to US-Philippine relations in general. Marcos now appears to want an agreement and he seems willing to make the compromises necessary to reach it.

—He has accepted our oral clarification of the application of the Mutual Defense Treaty and has downplayed demands for formal written assurances.

—He has taken the emotionalism of “Philippine sovereignty” out of GOP approach to issues bearing on the bases and appears to have decoupled this from the criminal jurisdiction question. He has acknowledged the importance of effective U.S. operation of the bases.

—He is emphasizing US-Philippine defense cooperation; he has dropped the demand for “rent” and now treats the question of base compensation more in terms of U.S. support for Philippine self-reliance in the defense field.

Marcos also has taken personal charge of the negotiating process and wants to begin as soon as the new U.S. Ambassador arrives in Manila. He probably expects the Ambassador to bring a substantive response to the letter delivered by Mrs. Marcos to the President.6

The change in Philippine approach clearly presents us with some opportunities and some problems. We welcome signs of greater Philippine flexibility and their willingness to deal with issues in a more pragmatic way. In response we have taken steps to indicate our interest in a mutually satisfactory relationship:

—We have established a Joint US-RP Task Force in Manila to examine irritants at the bases.

—We have offered to provide a new range of proposals having to do with criminal jurisdiction and specifically with the review of U.S. official duty certificates.

—We have expressed our willingness to review the whole question of joint defense planning.

—We have agreed to examine their equipment requirements.

We do not know, however, precisely what the GOP has in mind when they speak of joint defense planning and a common integrated defense. Thus, we have asked Secretary of Defense Enrile to provide us his thoughts on this matter. We have asked for a statement of their equipment requirements by priority. We must approach these requirements with caution because of Philippine problems in Mindanao and our uncertainty about Philippine equipment demands.

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We also have emphasized to Marcos the difficulties of obtaining from Congress the previous levels of compensation that had been offered. Congressional concerns about human rights in the Philippines, tighter control of the budget, and limitations on arms transfers all continue to complicate our ability to deliver an agreement acceptable to the GOP.

While the mood in US-RP relations has changed, many difficult issues remain to be resolved. Some have been set aside momentarily such as base operating rights and those having to do with the status of US forces. Criminal jurisdiction remains an active issue which we will try to resolve with new proposals concerning the review process. Other issues having to do with joint defense planning, equipment requirements, and compensation cannot be fully assessed until the Philippines give us their promised thoughts on the subject.

[Omitted here is the remainder of the paper.]

  1. Source: Carter Library, National Security Affairs, Staff Material, Far East, Armacost Chron File, Box 5, 10/15–25/77. Secret; Sensitive.
  2. Ford met with Marcos in Manila on December 6 and 7, 1975. See Foreign Relations, 1969–1976, vol. E–12, Documents on East and Southeast Asia, 1973–1976, Document 341.
  3. See Document 296.
  4. See Documents 297299. The interagency study on the compensation package, August 22, 1977, is in Carter Library, National Security Affairs, Staff Material, Far East, Armacost Chron File, Box 4, 8/26–31/77.
  5. Reference may be to the diplomatic note Romualdez delivered to Oakley on August 17. The text of the note was transmitted in telegram 198196 to Manila, August 20. (National Archives, RG 59, Central Foreign Policy File, D770301–1306)
  6. See Document 303.