Talks on U.S. Bases in Philippines Break Off in Dispute Over Money

MANILA — Talks on the future of American military bases in the Philippines broke off Friday after the United States refused to meet Manila’s demand for $825 million in annual compensation.

U.S. negotiator Richard L. Armitage left for Washington to consult with President Bush with no sign that either side is ready to compromise and no date set for new talks on the bases, considered vital to U.S. military strategy in the region.

President Corazon Aquino says U.S. forces will have to leave Clark Air Base, Subic Bay Naval Base and other U.S. facilities unless there is an agreement by September. U.S. forces at the bases total 17,000 and 70,000 Filipinos are employed there.

Aquino is seeking the $825 million-a-year deal over seven years, while the United States is seeking a 10- to 12-year accord at $360 million a year.

After the talks broke off, spokesman Stanley Schrager said the United States had reached its limit. “That’s the message. There is no more money,” he told reporters.

Schrager said it was right for the Philippines to try to get as much as it could but “the U.S. ability to meet these needs has its limits. The limit with respect to bases-related compensation has been reached.”

U.S. strategists have said American forces can be redeployed in Singapore, Japan and Guam if an agreement is not reached.

Any new lease must be ratified by two-thirds of the Philippines’ 23-member Senate. More than half the senators say they want the bases closed.