The rest of the region may be recovering from the recession, but in the Philippines, kidnapping appears to be the only growth industry. The spate of hostage-taking and violence over the past week poses serious problems for a government that is signally failing to cope with the crisis. Contradictory reports coming from both sides and the seemingly ham-fisted way the latest kidnapping dramas have been handled is doing great harm to Manila's international image, and by implication, its economic future. The country is in danger of becoming off-limits to tourists, threatening its main foreign currency earner. A cut-off of much-needed foreign investment is only a matter of time, unless rebel groups can be brought under control, and some kind of stability restored. Guerilla organisations with separatist goals, such as the Abu Sayyaf group and Moro Islamic Liberation Front, which are conducting a decades-long fight for Muslim self-rule in the south, have so far rejected attempts to reach a peace deal. But it is increasingly obvious that they cannot be quelled by military means. Yesterday's rebel attacks in the cities of General Santos and Cotabato take the crisis to new heights, re-affirming the need for dialogue. It is not a question of giving in to terrorism. In kidnapping foreign tourists and conducting a terror campaign of beheading and using hostages as human shields, the rebels have hit on a guaranteed means of raising their international profile. Germany's proposal to allow in negotiators from other countries is perhaps the best way to solve the current crisis. An element of political neutrality might calm things down and give a breathing space for Manila to consider its next move. The separatist struggle is no longer an internal issue. It may be time to seek UN help in resolving it. While the deadlock continues, it poses a serious threat to stability across the country, with any disaffected group seeing kidnap as a legitimate means to achieve its aims.