Philippines signs pact with Islamists
MANILA : Philippine President Benigno Aquino said his government reached a preliminary agreement with Muslim rebels to end a decades-long insurgency that has killed at least 100,000 people and stunted growth in the mineral-rich south.
- Published: 7/10/2012 at 11:05 PM
- Newspaper section: topstories
Al-Haj Murad Ebrahim, self-styled chairman of the Moro Islamic Liberation Front, poses with MILF combatants for a photo taken in August of last year in a rebel-held area of Mindanao. (AFP Photo)
A new political group called "Bangsamoro" will take the place of the autonomous region in Mindanao, Mr Aquino said in Manila Sunday. The designation "Bangsamoro" - loosely translated as Area of the Moro, or native southerners - has been used by the MILF for years to describe their "liberated area" during the southern war.
Talks between Philippine officials and the Moro Islamic Liberation Front concluded in the Malaysian capital Kuala Lumpur, and Mr Aquino and Malaysian leader Najib Razak will witness the signing of the accord in Manila next Monday.
"This framework agreement paves the way for a final, enduring peace in Mindanao," Mr Aquino said, flanked by his cabinet. "This means that hands that once held rifles will be put to use tilling land, selling produce, manning work stations, and opening doorways of opportunity for other citizens."
While economic growth in the Philippines is accelerating, the insurgency has frustrated efforts by companies including Xstrata Plc (XTA) and Sumitomo Metal Mining Co. to tap an estimated $312 billion in mineral deposits in the south, and damaged Mr Aquino's efforts to further boost foreign investment. Death squads that human-rights groups have linked to police and the military, contract killings over land disputes, and al-Qaeda- affiliated terrorists in Mindanao add to the mix of violence as the nation pursues its first investment-grade credit rating.
The benchmark Philippine Stock Exchange Index has gained about 24 per cent this year, while the peso climbed 0.7 per cent last week to complete its biggest weekly gain in a month.
"It could help sustain the rally in the stock market," Astro del Castillo, managing director at First Grade Finance Inc., said by phone from Manila Sunday. "It's one of the islands that's really underdeveloped. If there is peace, investments will pour in and push the economy of the country higher."
The Philippines ranked 126th of 144 countries in the latest World Economic Forum survey on the cost to business from terrorism. Fifty-four per cent of mining companies said issues such as attacks by terrorists, criminals and guerrilla groups are a strong deterrent for investors in the Philippines, the second-highest among 93 jurisdictions in a Fraser Institute poll released in February.
"We fully support the ongoing peace process and hope the parties can continue to avoid violence as they work toward a final resolution that will last for generations and benefit all the people of the Philippines," US Ambassador Harry K. Thomas, Jr. said in a statement from Manila Sunday.
The violence also exacerbates poverty, a Jan 26 report by the Philippine foreign chambers of commerce said. About 30.3 per cent of the people in Mindanao, home to about a quarter of the Philippines's 100 million people, said they had nothing to eat for at least one day in the three months to August, the highest of the nation's three main regions, according to a survey by Manila-based polling company Social Weather Stations released Oct 1. That was the highest among the country's three main regions, and up from 24 per cent in March 2010, before Mr Aquino was elected.
Mr Aquino has taken steps to contain the nation's budget deficit and lure foreign investors as he increases state spending to a record and aims to spur growth to as much as 7 per cent in 2013. The government has boosted asset sales and tax collection as it steps up investment in infrastructure including roads and ports to create jobs and reduce poverty.
Standard & Poor's in July raised the country's debt rating to BB+, one level below investment grade, citing improved prospects for economic growth. The $225 billion economy expanded 5.9 per cent last quarter and 6.1 per cent in the first half of the year, according to government data.
"It adds to the positive momentum in the Philippines," said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. "The economy is doing very well, and a peace deal is going to help sentiment quite a bit. There have been false starts in past years in terms of the peace process. So there is also likely to be some wait-and-see attitude to see if this one sticks. We remain fairly optimistic about this as it's clearly going on the right track."
As the island farthest from Manila, Mindanao hasn't been at the top of government spending priorities, keeping many of its provinces underdeveloped and helping engender a sense of resentment. The US set up a military base in Zamboanga on the west coast of Mindanao and has had about 600 troops stationed there for the past decade to combat terrorists.
Waves of migration by Catholic settlers have overwhelmed Mindanao's Muslim population, which had resisted Spanish conquest. Now outnumbered about five-to-one, they are concentrated in many of its poorest areas.
Mr Aquino Sunday called the previous setup a "failed experiment." The new agreement will add six towns and several villages to the five provinces of the region and see rebel fighters disarmed, he said. A final peace agreement may be signed within the year, Mr Aquino's spokesman, Edwin Lacierda, said on Oct 3.
"Mindanao holds tremendous opportunity for investors," Rommel Banlaoi, executive director of the Philippine Institute for Peace, Violence, and Terrorism Research in Manila said by telephone. The framework agreement shows that the peace process is moving forward, "but more work needs to be done" before negotiators arrive at a final settlement, he said.
"The tougher job will be how to come up with a final agreement," Mr Banlaoi said.
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- Writer: Bloomberg