ACTING SECRETARY OF DEFENSE PATRICK SHANAHAN: Well Mr. Secretary, it's great to have you here back in the Pentagon. I think it's your second visit here, our -- our first together. I was commenting to the secretaries, quite the marathon runner, that maybe next time on your -- on your visit, we could do some physical therapy together.
But we're -- we're very pleased to have you here to spend time with us and I think it's a good follow up to Secretary Pompeo's visit ...
PHILIPPINES SECRETARY OF NATIONAL DEFENSE DELFIN LORENZANA: Yes, yes.
SEC. SHANAHAN: ... and to reinforce the strength of our relationship and to talk about building on that relationship going forward, particularly as the Indo-Pacific continues to grow, not just in its strategic importance but economic importance.
There are defense cooperation opportunities between our countries and opportunities to fight terrorism together and I look forward to some very productive conversations today.
MIN. LORENZANA: Of course.
SEC. SHANAHAN: Please.
MIN. LORENZANA: I'll just read my statement.
SEC. SHANAHAN: Yes.
MIN. LORENZANA: (Inaudible) and members of the U.S. delegation and my delegation, (inaudible). First of all, let me express my appreciation for your warm welcome this afternoon, and also that (inaudible) in the position at the secretary of defense.
I and Jim Mattis had a very close working relationship. We've met several times, and I believe that the Philippines-U.S. defense relations will continue to develop under your leadership, make our NATO commitment work together, addressing some security challenges for our armed forces.
Our alliance also remains strong, in spite the complex, demanding security environment all -- all over the world. This has made -- this has been made possible due to the close engagement that our countries have maintained throughout the years, through our alliance.
To keep the momentum we need to continue assessing the arrangements we have, ensure that the (inaudible). My department will continued to work closely with your -- with your side in this regard.
I encourage our officials to stay in close consultations through existing dialogue mechanisms, include but not limited to the Philippines-U.S. Bilateral Strategic Dialogue, or BSD, and the Mutual Defense Board Security Engagement Board, MDBSEB, which is held every year.
We welcome this steady progress of the implementation of the (inaudible). We welcome the completion of projects in Basa Air Base, which we inaugurated with your ambassador this year, and hope that the rest of the projects are successfully carried out in the four other sites that we have previously agreed upon.
This month, we will be holding the 34th iteration of the Annual Baliktan exercise, which started yesterday. Out of all of our activities, the Baliktan is especially critical, as it is a main exercise that develops interoperability between our forces.
As such I encouraged our planners to come up with ways to ensure that the Baliktan exercise addressing the training needs of both armed forces.
Furthermore, in no uncertain terms, the agreement between both sides to ensure that our -- all of our activities are of high value, as well as mutually beneficial.
Let me reiterate our appreciation for the U.S. continued support in Marawi, and other terrorism-related incidents. We have a long history of counter-terrorism operations, and we hope to sustain this through real-time information sharing, intelligence exchange and training.
The Philippines also continues to appreciate the U.S.' support for the Philippines effort to build our overall defense capabilities.
The air force's modernization program remains a priority and we appreciate the U.S. contribution to this program, and we have been receiving a lot of equipment in the recent years, especially last year.
I look forward to our discussion this afternoon. Thank you for the invitation. I'll ensure that our meeting today will be just as productive as my previous ones.
SEC. SHANAHAN: It’s good to have you here. Thank you.
Q: Mr. Secretary, is cutting off U.S. assistance to countries in Central America going to have a negative effect?
SEC. SHANAHAN: I – as is said earlier, I plan to talk to Secretary Pompeo later this afternoon to discuss what the plan is going forward regarding those countries.
Q: Might it have a negative effect on U.S. military-to-military relationships with those countries, you think?
SEC. SHANAHAN: I think our military-to-military relationships will continue. We've had long-term relationships, and that's why those meetings with secretary -- or Pompeo are very critical, so we can discuss that going forward.
Q: Mr. Minister? Mr. Minister, I wonder, sir, what's your concern about the rising of -- of China in the South China Sea, as well as its very hungry appetite for Subic Bay?
(CROSSTALK)
MIN. LORENZANA: Me?
Q: Yes, sir.
MIN. LORENZANA: Yeah, it's -- it's very concerning. In fact, they have been doing the building of islands from -- from reefs since, I think, 2011, 2012. So it concerns us because they are encroaching on our EEZ.
Now, with regard to Subic, the -- they are interested in the Subic. There are two shipbuilding -- Chinese shipbuilding companies who are interested from the get go when they learn about the financial trouble of Hanjin, and they're waiting in the wings.
But we are also talking to a lot of interested parties on the U.S., on Japan, Korea, from European countries, and from Singapore and Indonesia.
Q: Thank you.
MIN. LORENZANA: So -- but if no one will be interested, then we do not want others to come in and… of the country, the government of the Philippines is ready to get in and run this…
Q: Mr. Secretary? Could you give us an update on where things stand with -- with the new Niger review?
SEC. SHANAHAN: Well, just -- let me -- let me start with to the families, I'm not trying to delay a report out. You know, when I undertook the role, I wanted time to review the investigation, and really this is just a kind of expedited way for me to make sure I have enough time to understand the -- the reports and the details, so I expect this to go very, very quickly. Thanks, everybody.