Philippine Military Frees Hostages After Clashes in South

The Philippine military rescued 98 hostages as it pushed back Muslim rebels whose attacks in the country’s south presented President Benigno Aquino with his biggest security threat since taking office three years ago.

The military recaptured 70 percent of the territory seized by Moro National Liberation Front fighters since they began an offensive in the southern city of Zamboanga Sept. 9, military spokesman Lieutenant Colonel Ramon Zagala said in a statement. In a new setback, the city’s police chief was abducted today.

Aquino is under pressure to end the standoff, which has complicated efforts to conclude a peace deal with a separate group of rebels after a four-decade insurgency on Mindanao. That insurgency killed about 200,000 people and has stifled development on the island, where per capita gross domestic product is about a quarter the national average.

“The Zamboanga incident illustrates just how difficult it is to restore peace in Mindanao after four decades of war,” Steven Rood, country representative for the Asia Foundation, said in a telephone interview in Manila. “There are so many different groupings that over the years have had injustices visited upon them or grievances that haven’t been addressed.”

Two days of talks between Aquino’s government and Malaysia, which is facilitating peace talks with the Moro Islamic Liberation Front, ended Sept. 14 in Manila, Malaysia’s foreign ministry said in a statement today. The two sides “looked forward to a final peace agreement to be concluded in the near future,” Malaysia’s Foreign Ministry said in a statement.

Hostages Freed

The Philippine military says 71 rebels, along with nine government troops and policemen and seven civilians, have been killed in the fighting. Police say 123 hostages have been freed so far.

Rebels abducted Senior Superintendent Chiquito Malayo near the town of Arena Blanco at 10 a.m. today, police logistics chief Senior Superintendent Edwin de Ocampo said by phone. Malayo was taken while inspecting an area that had seen clashes between government forces and the insurgents, he said.

A rescue operation to free Malayo has begun, Chief Inspector Ariel Huesca, a police spokesman, said in a mobile-phone message.

The military launched air strikes from helicopters yesterday. More than 67,000 people have fled their homes in Zamboanga where rebels are holed up, the National Disaster Risk Reduction and Management Council said on its website. The Philippine Stock Exchange Index has risen 5.8 percent since Sept. 9.

Economic Dislocation

“I don’t think the protracted situation there will cause economic dislocation,” Budget Secretary Butch Abad said in Manila today. “It will not be substantial enough to dent the economic climate.”

The U.S. designated 26.4 million pesos ($603,000) for relief to Zamboanga, the U.S. Embassy in Manila said in a Sept. 12 statement. Delivery was coordinated by the Philippine military and police, with help from the U.S. Joint Special Operations Task Force-Philippines, according to the statement.

To contact the reporter on this story: Norman P. Aquino in Manila at naquino1@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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