I. INTRODUCTION
Thank you for responding to our invitation to this 7th National Security Council (NSC) meeting.

Of all the meetings of this policy council so far, this is the most crucial — so serious are the issues before us. And never has our need been greater for solidarity among our national leaders — so that we can face this crisis with both moral authority and unified political will.

We have four topics to take up here this morning:

The first is our peace and development program in Mindanao, particularly in the Autonomous Region, or ARMM.

This basic program is going well. But its success depends on stability in our main southern island, which we must insure through our ongoing peace process. And stability in the south depends in turn on our reaching out to secessionists there, sincerely and convincingly, with our program for peace and development, and on frustrating the efforts of various splinter armed groups to foment renewed conflicts.

The second topic — related to the first — is an assessment of the current security situation in Mindanao.

The crucial change here is the qualitative increase in the capability of the fundamentalist Moro Islamic Liberation Front (MILF) to disrupt the stability of central Mindanao, where its forces are concentrated. Since 1994, the MILF has heavily built up both its personnel strength and its firepower.

The increasing linkages being built by the extremist Abu Sayyaf group and the equally radical National Islamic Command Council (NICC) — with international terrorist networks are another disturbing development. These linkages will not only support terrorist activities in our country. They also make the Philippines a potential base for attacks against terrorist targets in other countries.

The third topic, also related to the above, is the progress of our peace initiative — specifically, the prospects of the third plenary round of talks between our government panel and the Moro National Liberation Front (MNLF) chaired by Nur Misuari, which resumes in Jakarta, Indonesia in a few days.

As you know, we have concluded negotiations with the military rebels. We have also opened up fresh channels of communications with the National Democratic Front (NDF) — in our ceaseless effort to restart the stalled GRP-NDF peace talks.

The most important benefit from our peace initiative so far is this: a broad national peace constituency, led by the private sector, has developed over these past three years — a wide base of concerned citizens that will not countenance the willful violation of the cease-fire by any of the contending forces.

Our fourth topic is the current situation in the South China Sea — in the light of our recent consultations with China and Vietnam.

All these four topics bear crucially on the stability our country needs — if we Filipinos are to succeed in modernizing our economy; actualizing deep social reforms, and lifting up the common life.
II. ELABORATION ON MAIN TOPICS
Let me make a few preliminary observations before we begin this morning’s work.

In Mindanao, our basic policy is to reconcile differences left over from colonial times. We recognize the unique circumstances of central Mindanao including Basilan, sulu and Tawi-Tawi — the historical struggles, inherited from the colonial period, that disadvantages their courageous and freedom-loving people.

We understand the roots of Muslim disaffection from the national community. And we are determined to meet their rightful demand for their share of development in Mindanao.
“MINDANAO 2000!!!”
Within a framework plan for “Mindanao 2000!!!,” we are investing heavily in infrastructure and other basic services in our southern main island. Our public investments there exceed, comparatively, all those made by previous administrations. We have also initiated an East ASEAN Growth Area (EAGA) — to enable the people of Mindanao to include those in the ARMM to tap into the vigorous economies of our ASEAN neighbors. EAGA reconstitutes an ancient trading zone once centered on the maritime Sultanate of Sulu. It makes Mindanao our country’s front door to ASEAN.

These policy interventions — taken in the context of our opening of the national economy — have begun to generate economic growth in Mindanao. In 1994, for example, the island’s gross domestic product was more than 5% — almost double that of 1993. Mindanao’s exports in 1994 were close to 50% higher than 1993; and direct foreign investments more than doubled during the same period. Cagayan de Oro, General Santos, Davao City and Zamboanga have become regional growth centers.

But the real challenge in developing Mindanao lies not in making its growth centers more prosperous. The challenge lies in bringing to the mainstream of national development its predominantly Muslim provinces.
BUILDING A CULTURE OF PEACE IN MINDANAO
In fact, we are even now studying preferential economic arrangements for our Muslim and other cultural communities in a concept similar to Malaysia’s Bumiputra policy — which sets achievable goals for increasing shares in the country’s corporate wealth for indigenous peoples.

Preferences in economic activity, in civil-service posts, and in education programs will help redress the historical disadvantages that prevents them from competing — on equal terms — with mainstream Filipinos.

But none of these programs will work without political stability.

In recent months, extremist groupings — determined to establish a fundamentalist Muslim state through terrorism — have begun to threaten our efforts at developing Mindanao.

The MILF, for example, have been disrupting road-building and irrigation projects designed to have a high impact on the economy of central Mindanao.

Despite every provocation from these extremist groups, our forces on the ground have exercised maximum restraint and maintained the cease-fire.

Government, in fact, carried on the peace process with the MNLF despite the terrorist raid on Ipil town in Zamboanga del Sur last April.

Over these past two years, we have invested much time, resources and patience in building a culture of peace between Christians and Muslims in Mindanao. Into this effort, we have enlisted Islamic and Christian religious leaders, academics, non-governmental organizations (NGOs), local governments, civic groups and other leaders of civil society — to take up the advocacy of peace in their communities.
GRP-MNLF TALKS
Let me also acknowledge that, over the last two years that the GRP-MNLF talks have gone on, Chairman Nur Misuari and his advisers have been as forthcoming and as patient as our own negotiators have been.

Our talks have been supported unequivocally by Indonesia and the other members of the Committee of Six of the Organization of the Islamic Conference (OIC).

We are disposed to concede every demand of the MNLF. Our only constraint is that every agreement must comply with constitutional limits.

About the outcome of the Jakarta talks, we are modestly hopeful: we foresee an agreement on the less-contentious issues.

Any agreement we will welcome — as a mechanism for building mutual confidence in eventually bridging our larger differences.

Regardless of the outcome of these talks, we will not despair of looking for creative solutions to the problems that divide us from our Muslim brethren.
THE SOUTH CHINA SEA
In East Asia, as here at home, security matters have become connected inextricably with economic issues.

On our dispute with China over its encroachment on Panganiban (“Mischief”) Reef in the Kalayaan Island Group, I have been encouraged by the support we received from the Association of Southeast Asian Nations (ASEAN), the European Union (EU) and the leaders of the Group of 77 of the UN (G-77) and the Non-Aligned Movement (NAM), whom I met last month in Cartagena, Colombia.

At the United Nations, I was subsequently reassured by President Jiang Zemin’s declaration — made solemnly before the General Assembly — that China poses no threat to the growth and stability of the Asia-Pacific.

In private meetings with me in New York — and most recently at the Asia-Pacific Economic Cooperation (APEC) in Osaka — President Jiang also reaffirmed the agreement between our two governments to observe a code of conduct in resolving our opposing claims in the South China Sea.

I returned home comforted by President Jiang’s assurances about China’s desire to be seen as a peaceful and cooperative member of the global community.

But the basic requirement is for us to maintain constant vigilance, in concert with our ASEAN partners, especially in monitoring the actions and words of our powerful neighbor.

This is why our government cannot become completely at ease in our bilateral relations until the situation at Panganiban Reef is completely normalized.
III. CONCLUDING MESSAGE
Finally — let me say that in its efforts to resolve every one of these problems, government has not been wanting in goodwill and in determination.

The situation in Mindanao — particularly — now approaches a decisive point. Time is working on the side of our policies and Mindanao’s development: those who oppose them must act — or become marginalized.

Whatever happens, the national leadership cannot afford to waver — because the enemies of peace will take any dissension among us as leaders to be a sign of government’s weakness.

Our consensus in this council is critical. We need everyone’s wholehearted support, regardless of party affiliation.

I assure you all that the administration will ensure it has not only a legal but a moral basis for whatever decision it might have to take in Mindanao. All our actions there will be based on the highest moral considerations, with the national interest and our people’s general welfare at the core.

As your President, I ask for your full support.

Thank you.