CONFIDENTIAL
060051
MDHIAN 2767
CHRISTIANS IN ARMED BATTLE. MARCOS IS ALSO ON THE BACK BURNER. THERE IS NO REAL SUPPORT FOR HIM, DESPITE A RALLY FOR HIS 70TH BIRTHDAY ON 11 SEPTEMBER.
8 =
EXECUTIVE AND CONGRESS HAVE BOTH DECIDED THAT BETTER PAY FOR THE AFP IS ESSENTIAL. BUT IT IS HARD TO FIND THE MONEY. ONGPIN HAS SUGGESTED IT SHOULD COME FROM PRUNING LOWER PRIORITY GOVERNMENT PROGRAMMES. BUT MANY SENATORS AND CONGRESSMEN HAVE FOCUSSED ON WHAT THEY NAIVELY SEE AS AN
REDUCING THE FUNDS ALLOCATED TO DEBT
EASIER OPTION SERVICING. THERE ARE SIGNS THAT INFLATION IS BEGINNING TO RISE FROM ITS PRESENT LEVEL OF SOME 5 PERCENT EG BECAUSE OF BUS FARE INCREASES SINCE THE COUP. THE CENTRAL BANK HAS ALLOWED THE PESO TO DEPRECIATE BY 1.5 PERCENT AGAINST THE THE DOLLAR (WHICH IS ITSELF DEPRECIATING). LAND REFORM IS BOGGED DOWN IN THE HOUSE OF REPRESENTATIVES WITH A PRO- LANDLORD BILL EXEMPTING COCONUT AND SUGAR PLANTATIONS AS THE PRESENT FRONT RUNNER.
9.
THE AMERICANS ARE DOING WHAT THEY CAN TO HELP MRS AQUINO, BOTH BY PUBLIC STATEMENTS OF SUPPORT AND BY SCRATCHING AROUND FOR MORE AID. EXTRA AID IS ALSO EXPECTED FROM JAPAN. BUT THE PHILIPPINE AUTHORITIES ARE NOT GOOD AT ABSORDING THE AID ON OFFER. FOR THIS REASON, THE UK NEED NOT BE ASHAMED AT BEING ONE OF THE FEW EUROPEAN COMMUNITY
COUNTRIES WITHOUT ARE MADE WITH THE
A SIGNIFICANT AID PROGRAMME. IF COMPARISONS ITALIAN DEPUTY FOREIGN MINISTER, BONALUMI, WHO IS HERE THIS WEEK TO OFFER US DOLLARS 50 MILLION, WE CAN SAY WE ARE READY TO CONSIDER SUBSTANTIAL ATP TO SUPPORT PLESSEY'S AND JOHN BROWN'S BIDS FOR TELEPHONES AND GAS
TURBINES CONTRACTS.
MACINNES
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ΜΑΙΝ
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SEAD
PROTOCOL D
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DISTRIBUTION
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HKD
PS/LORD GLENARTHUR
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