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Philippines News, Philippine News, Philippines capital: Manila |
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Philippines News Sources: News Search <Philippines> in: <Philippines News> in: <Philippine News> in:
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Secret
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US
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Philippines
- Emergency
- Leandro
Aragoncillo
- 
Dick
Cheney
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Government
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Military
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Intelligence
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Police
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Politics
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New
Jersey - 
Law
- "Spy
Probe Widens to Years Suspect Was at White House:
Ex-Marine Allegedly Sent Files to Philippine Opposition." ... "The Justice
Department is investigating whether a naturalized U.S. citizen from the
Philippines stole classified documents while he worked in the office of
[Republican] Vice President Cheney and provided the information to opposition
politicians in Manila [Philippines capital], [Republican] Bush administration
officials said yesterday." ... "The possibility that Leandro Aragoncillo
was passing the material while stationed as a U.S. Marine security official
at the White House marks a dramatic expansion of the case against him and
a
former Philippine police official, Michael Ray Aquino. Both were arrested
and charged in federal court in Newark [New Jersey] last month with sending
classified information obtained this year to the Philippines -- more than
two years after Aragoncillo left the White House and went to work as an
FBI intelligence analyst." ... "Officials from the White House, Justice
Department and FBI declined to comment late yesterday, other than to confirm
that Aragoncillo first went to work at the White House in 1999, when [Democratic
Vice President] Al Gore was vice president. ABC News reported last night
that Aragoncillo had admitted taking classified documents while he worked
in Cheney's office." ... "Joseph Estrada, the former Philippine president
who was forced from office four years ago by mass demonstrations, has acknowledged
receiving documents from Aragoncillo while the suspect was still in the
Marines." ... "A document from late July reportedly detailed coup discussions
at a secret conclave of about two dozen young army and naval officers in
Manila. Another account, citing a clandestine source, described Arroyo
calling an emergency meeting of her commanding generals to ensure their
backing." (1, 2,
3)
-By Dan Eggen and Alan Sipress
-WashingtonPost
- 
- 
- 
-
- "Philippines
sending extra 200 troops to Haiti." ... "The Philippines
will send 200 additional troops to Haiti to help United Nations' peacekeeping
forces curb political unrest ahead of elections, the president said on
Tuesday." ... "The Philippines sent up to 150 soldiers to Haiti last November
to join nearly 4,000 Brazilian-led peacekeepers on the Caribbean island,
now run by an interim government charged with organising fresh elections,
scheduled for November." -Reuters
via -AlertNet.org/Newsdesk
- 
- 
- 
- 
-
- "Powell
urges coalition leaders to keep troops in Iraq."
... "Secretary of State Colin Powell said Tuesday the U.S.-led coalition
in Iraq remains strong despite decisions by Spain and Honduras to pull
out their troops. Later, the Dominican Republic announced that it also
would withdraw its troops." ... "Powell told reporters that leaders of
13 coalition countries with whom he spoke by telephone Monday and Tuesday
"all expressed steadfast support" for their respective troop commitments."
... "Among the leaders Powell spoke with was Thai Foreign Minister Surakiart
Sathirathai." ... "In addition to Surakiart, Powell spoke with leaders
of El Salvador, Dominica, Norway, Denmark, Hungary, Portugal, Poland, Bulgaria,
Holland, Romania, the Philippines and Ukraine." -By
George Gedda -AP
via -SFGate.com
-
- "U.S.
Envoy in Manila to Head Iraq Democracy Effort." ...
"Francis Ricciardone, the U.S. ambassador to the Philippines and a Middle
East expert, said on Wednesday he is returning to Washington for several
months to oversee efforts to bring democracy to post-war Iraq." ... "Secretary
of State Colin Powell informed Philippine President Gloria Macapagal Arroyo
of Ricciardone's absence on Wednesday. Joseph Mussomeli, the deputy chief
of mission, will run the embassy while the ambassador is away." (1, 2)
-By John O'Callaghan -Reuters
-
-
-
- "State
Department Noon Briefing Transcript [List of the 30 Nations Supporting
US Disarmament of Iraq]." ... "BRIEFER: Richard
Boucher, Spokesman." ... "MR. BOUCHER: There are 30 countries who have
agreed to be part of the coalition for the immediate disarmament of Iraq.
I'd have to say these are countries that we have gone to and said, "Do
you want to be listed?" and they have said, "Yes."" ... "They are: Afghanistan,
Albania, Australia, Azerbaijan, Colombia, the Czech Republic, Denmark,
El Salvador, Eritrea, Estonia, Ethiopia, Georgia, Hungary, Iceland, Italy,
Japan, Korea, Latvia, Lithuania, Macedonia, the Netherlands, Nicaragua,
the Philippines, Poland, Romania, Slovakia, Spain, Turkey, the United Kingdom,
and Uzbekistan." ... "In addition to these countries, there are actually
another 15 or so that we know of, probably more than 15, that are cooperating
with us in -- and the coalition, or perhaps offering defensive assets in
the event that Saddam resorts to the use of weapons of mass destruction."
-Washington
File -State.gov
- "Pneumonia
'worldwide threat'" ... "The World Health Organi-sation
has described a mysterious form of pneumonia in Asia as "a worldwide health
threat" after a rise in the incidence of the illness across the region
and nine deaths." ... "The WHO said at the weekend it had received reports
from Canada, China, Hong Kong, Indonesia, the Philippines and Thailand
of the illness, an atypical form of pneumonia called Severe Acute Respiratory
Syndrome [SARS]." -By Rahul Jacob
-FT.com
- 
- "U.S. to send
1,700 troops to Philippines." ... "The United States
will send more than 1,700 troops to the Philippines in the next few weeks
to fight Muslim extremists in the southern part of the country, opening
a new front in the fight against terrorism." -By Eric
Schmitt -NYTimes
via -IHT.com
- "U.S.
soldiers will fight in Philippines." ... "The United
States is sending about 3,000 troops to the Philippines in the coming weeks
to root out Muslim extremists in the southern part of the archipelago nation,
Pentagon officials said Thursday." ... "Unlike recent deployments of Americans
for training exercises with Philippine troops, officials said, the new
commitment calls for the first time for direct involvement of U.S. forces
in patrols designed to capture or kill members of Abu Sayyaf, a militant
Islamic group, in the jungles of Sulu province." -LAtimes
via -WCFCourier.com
- "19
Journalists Killed [Worldwide] For Their Work In 2002:
Lowest number on record; Russia, Colombia, and the West Bank top list."
... "A total of 19 journalists were killed worldwide for their work in
2002, according to the Committee to Protect Journalists (CPJ). This number
marks a sharp decrease from 2001 when 37 journalists were killed, eight
of them while covering the war in Afghanistan. Of the 19 journalists killed
in 2002, most were targeted in direct reprisal for their work, and their
killers had not been brought to justice at year's end." ... "This is the
lowest number of journalists killed in the line of duty that CPJ has recorded
since it began tracking the deaths in 1985." ... "Still, in 2002, journalists
remained at great risk. In countries such as Russia, Colombia, Pakistan,
India, Bangladesh, and the Philippines, local journalists were murdered
in direct reprisal for their reporting on crime and corruption, most of
them with impunity. Cameramen and photographers were especially vulnerable
to cross fire and targeting by military forces—five were killed in 2002,
including two who were covering conflict in the West Bank." ... "Some statistics
fluctuate from year to year, but others remain constant in such countries
as Russia and Colombia, where journalists die virtually every year because
of their work." -CPJ.org
- "White
House Denies Assertions on Preoccupation With Iraq."
... "The White House disagreed sharply today with assertions by senior
Democratic senators that the campaign against terrorism is lagging and
that a preoccupation with Iraq is one of the reasons." ... ""We have locked
up or detained or eliminated important Al Qaeda leaders," Condoleezza Rice,
President Bush's national security adviser, said at a news briefing." ...
""We have eliminated their base in Afghanistan, so they cannot operate
in the way that they have in the past. We have strengthened the resolve
and the capacity of countries like Yemen and the Philippines and countries
in Africa to deal with this threat. A lot has been done."" ... "Dr. Rice
noted that Mr. Bush has said repeatedly that the campaign will be a long
one. "It took a while for them to lodge themselves in 60 countries around
the world, including the United States," she said. "It's going to take
a while to break them up."" (1, 2)
-NYTimes via -Google-News
"Rescue
raid ends in hostage deaths: Jungle action
leaves missionary, nurse, some troops dead." ... "Philippine commandos
swept into a jungle hideout of long-sought al Qaeda-linked Abu Sayyaf guerrillas
Friday...." ... "After a firefight of more than two hours, Philippine military
officials found that Martin Burnham, from Wichita, Kansas, and Deborah
Yap, a nurse, had been killed in the hail of bullets. Officials said that
several Philippine soldiers and rebels also died in the rescue attempt."
-CNN
Economy
Religion
Languages
Education
From the U.S. Department of State, Background Note: Philippines (21 June 2007 - information may have changed. For informational purposes only)
OFFICIAL NAME:
Republic of the Philippines
Philippines Geography
Area: 300,000 sq. km. (117,187 sq.
mi.).
Major cities (2005 estimate): Capital--Manila
(pop. 11.29 million in metropolitan area); other cities--Davao City
(1.33 million); Cebu City (0.82 million).
Terrain: Islands, 65% mountainous,
with narrow coastal lowlands.
Climate: Tropical, astride typhoon
belt.
People
Philippines People
Nationality: Noun--Filipino(s).
Adjective--Philippine.
Population (2007 estimate): 91.077
million; estimate for 2006: 89.5 million.
Annual growth rate: 1.764%.
Ethnic groups: Malay, Chinese.
Religions: Catholic 85%, Protestant
9%, Muslim 5%, Buddhist and other 1%.
Languages: Pilipino (based on Tagalog),
national language; English, language of government and instruction in education.
Education: Years compulsory--6
(note: 6 years of primary education free and compulsory; 4 years of secondary
education free but not compulsory). Attendance--94% in elementary
grades, 64% in secondary grades. Literacy--93.4%.
Health: Infant mortality rate
(2003)--29 per 1,000. Life expectancy (2005)--64.10 yrs. for males;
70.10 yrs. for females.
Work force (2006): 35.79 million.
Services
(including commerce and government, 2005)--48%; agriculture--20%;
industry--36%.
Government
Philippines Government
Type: Republic.
Independence: 1946.
Constitution: February 11, 1987.
Branches: Executive--president
and vice president. Legislative--bicameral legislature. Judicial--independent.
Administrative subdivisions: 15 regions
and Metro Manila (National Capital Region), 79 provinces, 115 cities.
Political parties: Lakas-Christian
Muslim Democrats, Nationalist People's Coalition, Laban ng Demokratikong
Pilipino, Liberal Party, Aksiyon Demokratiko, Partido Demokratikong Pilipino-Lakas
ng Bayan, and other small parties.
Suffrage: Universal, but not compulsory,
at age 18.
Economy
Philippines Economy
GDP (2006): $116.9 billion.
Annual GDP growth rate (2006): 5.4%
at constant prices.
GDP per capita (2005): $1,024.
Natural resources: Copper, nickel,
iron, cobalt, silver, gold.
Agriculture: Products--rice,
coconut products, sugar, corn, pork, bananas, pineapple products, aquaculture,
mangoes, eggs.
Industry: Types--textiles and
garments, pharmaceuticals, chemicals, wood products, food processing, electronics
assembly, petroleum refining, fishing.
Trade (2006): Exports--$47.2
billion. Imports--$51.6 billion.
People
Philippines PEOPLE
The majority of Philippine people
are of Malay stock, descendants of Indonesians and Malays who migrated
to the islands long before the Christian era. The most significant ethnic
minority group is the Chinese, who have played an important role in commerce
since the ninth century, when they first came to the islands to trade.
As a result of intermarriage, many Filipinos have some Chinese and Spanish
ancestry. Americans and Spaniards constitute the next largest alien minorities
in the country.
More than 90% of the people are Christian; most were converted and became westernized to varying degrees during nearly 400 years of Spanish and American rule. The major non-Hispanicized groups are the Muslim population, concentrated in the Sulu Archipelago and in central and western Mindanao, and the mountain groups of northern Luzon. Small forest tribes still live in the more remote areas of Mindanao.
About 87 native languages and dialects are spoken, all belonging to the Malay-Polynesian linguistic family. Of these, eight are the first languages of more than 85% of the population. The three principal indigenous languages are Cebuano, spoken in the Visayas; Tagalog, predominant in the area around Manila; and Ilocano, spoken in northern Luzon. Since 1939, in an effort to develop national unity, the government has promoted the use of the national language, Pilipino, which is based on Tagalog. Pilipino is taught in all schools and is gaining widespread acceptance across the archipelago. Many use English, the most important nonnative language, as a second language, including nearly all professionals, academics, and government workers. In January 2003, President Gloria Macapagal-Arroyo ordered the Department of Education to restore English as the medium of instruction in all schools and universities. However, most of the English-speaking community still writes at a middle grade level, although, as noted, exceptions are found among the highly or U.S. educated populations. Only a few Filipino families use Spanish as a first language.
The Philippines has one of the highest literacy rates in the East Asian and Pacific area. About 92% of the population 10 years of age and older are literate.
History
Philippines HISTORY
The history of the Philippines can
be divided into four distinct phases: the pre-Spanish period (before 1521);
the Spanish period (1521-1898); the American period (1898-1946); and the
post-independence period (1946-present).
Pre-Spanish Period
The first people in the Philippines,
the Negritos, are believed to have come to the islands 30,000 years ago
from Borneo and Sumatra, making their way across then-existing land bridges.
Subsequently, people of Malay stock came from the south in successive waves,
the earliest by land bridges and later in boats by sea. The Malays settled
in scattered communities, named barangays after the large outrigger
boats in which they arrived, and ruled by chieftains known as datus.
Chinese merchants and traders arrived and settled in the ninth century,
and 500 years later, Arabs arrived, introducing Islam in the south and
extending some influence even into Luzon. The Malays, however, remained
the dominant group until the Spanish arrived in the 16th century.
Spanish Period
Ferdinand Magellan reached the Philippines
and claimed the archipelago for Spain in 1521, and for the next 377 years,
the islands were under Spanish rule. This period was the era of conversion
to Roman Catholicism. A Spanish colonial social system was developed with
a government centered in Manila and with considerable clerical influence.
Spanish influence was strongest in Luzon and the central Philippines but
less so in Mindanao, save for certain coastal cities.
The long period of Spanish rule was marked by numerous uprisings. Towards the latter half of the 19th century, Western-educated Filipinos or ilustrados (such as national hero Jose Rizal) began to criticize the excesses of Spanish rule and instilled a new sense of national identity. This movement gave inspiration to the final revolt against Spain that began in 1896 under the leadership of Emilio Aguinaldo and continued until the Americans defeated the Spanish fleet in Manila Bay on May 1, 1898, during the Spanish-American War. Aguinaldo declared independence from Spain on June 12, 1898.
American Period
Following Admiral George Dewey's defeat
of the Spanish fleet in Manila Bay, the U.S. occupied the Philippines.
Spain ceded the islands to the United States under the terms of the Treaty
of Paris (December 10, 1898) that ended the war.
A war of resistance against U.S. rule, led by revolutionary President Aguinaldo, broke out in 1899. This conflict claimed the lives of tens of thousands of Filipinos and thousands of Americans. Although Americans have historically used the term "the Philippine Insurrection", Filipinos and an increasing number of American historians refer to these hostilities as the Philippine-American War (1899-1902), and in 1999, the U.S. Library of Congress reclassified its references to use this term. In 1901, Aguinaldo was captured and swore allegiance to the U.S., and resistance gradually died out until the conflict ended with a Peace Proclamation on July 4, 1902. However, armed resistance continued sporadically until 1913, especially in Mindanao and Sulu, with heavy casualties on both sides.
U.S. administration of the Philippines was always declared to be temporary and aimed to develop institutions that would permit and encourage the eventual establishment of a free and democratic government. Therefore, U.S. officials concentrated on the creation of such practical supports for democratic government as public education and a sound legal system.
The first legislative assembly was elected in 1907, and a bicameral legislature, largely under Philippine control, was established. A civil service was formed and was gradually taken over by the Filipinos, who had effectively gained control by the end of World War I. The Catholic Church was disestablished, and a considerable amount of church land was purchased and redistributed.
In 1935, under the terms of the Tydings-McDuffie Act, the Philippines became a self-governing commonwealth. Manuel Quezon was elected president of the new government, which was designed to prepare the country for independence after a 10-year transition period. World War II intervened, however, and in May 1942, Corregidor, the last American/Filipino stronghold, fell. U.S. forces in the Philippines surrendered to the Japanese, placing the islands under Japanese control. During the occupation, thousands of Filipinos fought a running guerilla campaign against Japanese forces.
The full-scale war to regain the Philippines began when General Douglas MacArthur landed on Leyte on October 20, 1944. Filipinos and Americans fought together until the Japanese surrendered in September 1945. Much of Manila was destroyed during the final months of the fighting, making it the second most devastated city in World War II after Warsaw. In total, an estimated one million Filipinos lost their lives in the war.
Due to the Japanese occupation, the guerrilla warfare that followed, and the battles leading to liberation, the country suffered great damage and a complete organizational breakdown. Despite the shaken state of the country, the U.S. and the Philippines decided to move forward with plans for independence. On July 4, 1946, the Philippine Islands became the independent Republic of the Philippines, in accordance with the terms of the Tydings-McDuffie Act. In 1962, the official Philippine Independence Day was changed from July 4 to June 12, commemorating the date independence from Spain was declared by Emilio Aguinaldo in 1898.
Post-Independence Period
The early years of independence were
dominated by U.S.-assisted postwar reconstruction. The communist-inspired
Huk Rebellion (1945-53) complicated recovery efforts before its successful
suppression under the leadership of President Ramon Magsaysay. The succeeding
administrations of Presidents Carlos P. Garcia (1957-61) and Diosdado Macapagal
(1961-65) sought to expand Philippine ties to its Asian neighbors, implement
domestic reform programs, and develop and diversify the economy.
In 1972, President Ferdinand E. Marcos (1965-86) declared martial law, citing growing lawlessness and open rebellion by the communist rebels as his justification. Marcos governed from 1973 until mid-1981 in accordance with the transitory provisions of a new constitution that replaced the commonwealth constitution of 1935. He suppressed democratic institutions and restricted civil liberties during the martial law period, ruling largely by decree and popular referenda. The government began a process of political normalization during 1978-81, culminating in the reelection of President Marcos to a six-year term that would have ended in 1987. The Marcos government's respect for human rights remained low despite the end of martial law on January 17, 1981. His government retained its wide arrest and detention powers, and corruption and cronyism contributed to a serious decline in economic growth and development.
The assassination of opposition leader Benigno (Ninoy) Aquino upon his return to the Philippines in 1983 after a long period of exile coalesced popular dissatisfaction with Marcos and set in motion a succession of events that culminated in a snap presidential election in February 1986. The opposition united under Aquino's widow, Corazon Aquino, and Salvador Laurel, head of the United Nationalist Democratic Organization (UNIDO). The election was marred by widespread electoral fraud on the part of Marcos and his supporters. International observers, including a U.S. delegation led by Senator Richard Lugar (R-Indiana), denounced the official results. Marcos was forced to flee the Philippines in the face of a peaceful civilian-military uprising that ousted him and installed Corazon Aquino as president on February 25, 1986.
Under Aquino's presidency, progress was made in revitalizing democratic institutions and civil liberties. However, the administration was also viewed by many as weak and fractious, and a return to full political stability and economic development was hampered by several attempted coups staged by disaffected members of the Philippine military.
Fidel Ramos was elected president in 1992. Early in his administration, Ramos declared "national reconciliation" his highest priority. He legalized the Communist Party and created the National Unification Commission (NUC) to lay the groundwork for talks with communist insurgents, Muslim separatists, and military rebels. In June 1994, President Ramos signed into law a general conditional amnesty covering all rebel groups, as well as Philippine military and police personnel accused of crimes committed while fighting the insurgents. In October 1995, the government signed an agreement bringing the military insurgency to an end. A peace agreement with one major Muslim insurgent group, the Moro National Liberation Front (MNLF), was signed in 1996, using the existing Autonomous Region in Muslim Mindanao (ARMM) as a vehicle for self-government.
Popular movie actor Joseph Ejercito Estrada's election as president in May 1998 marked the Philippines' third democratic succession since the ouster of Marcos. Estrada was elected with overwhelming mass support on a platform promising poverty alleviation and an anti-crime crackdown.
Gloria Macapagal-Arroyo, elected vice president in 1998, assumed the presidency in January 2001 after widespread demonstrations that followed the breakdown of Estrada's impeachment trial on corruption charges. The Philippine Supreme Court subsequently endorsed unanimously the constitutionality of the transfer of power. National and local elections took place in May 2004. Under the constitution, Arroyo was eligible for another six-year term as president, and she won a hard-fought campaign against her primary challenger, movie actor Fernando Poe, Jr., in elections held May 10, 2004. Noli De Castro was elected vice president.
Impeachment charges were brought against Arroyo in June 2005 for allegedly tampering with the results of the elections after purported tapes of her speaking with an electoral official during the vote count surfaced, but Congress rejected the charges in September 2005. Similar charges were discussed and dismissed by Congress in the summer of 2006.
Government
- Political
Philippines GOVERNMENT AND POLITICAL
CONDITIONS
The Philippines has a representative
democracy modeled on the U.S. system. The 1987 constitution, adopted during
the Aquino administration, reestablished a presidential system of government
with a bicameral legislature and an independent judiciary. The president
is limited to one six-year term. Provision also was made in the constitution
for autonomous regions in Muslim areas of Mindanao and in the Cordillera
region of northern Luzon, where many indigenous tribes still live.
The 24-member Philippine Senate is elected at large, and all senators serve six-year terms. Half are elected every three years. Of a maximum of 250 members in the House of Representatives, 212 are elected from single-member districts to serve three-year terms. The remainder of the House seats are designated for sectoral party representatives elected at large, called party list representatives; from the May 2004 elections, there were 24 such representatives in the House. All representatives serve three-year terms, with a maximum of three consecutive terms. On May 14, 2007, legislative and local elections were held; as of mid-May, official results were pending.
The government continues to face threats from terrorist groups, including the Communist New People's Army and Muslim groups. The terrorist Abu Sayyaf Group (ASG), which gained international notoriety with its kidnappings of foreign tourists in the southern islands, remains a major problem for the government, along with members of the Indonesian-based Jemaah Islamiyah (JI). Efforts to track down and destroy the ASG and JI have met with some success, especially in Basilan and Jolo, where U.S. troops advised, assisted, and trained Philippine soldiers in counterterrorism. In August 2006, the Armed Forces of the Philippines began a major offensive against ASG and JI on the island of Jolo. This offensive was remarkably successful and has resulted so far in the deaths of Abu Sayyaf leader Khadafy Janjalani and his deputy, Abu Solaiman. The U.S. Government provided rewards to Philippine citizens whose information led to these deaths in the military operations, as well as to many other operations against terrorist leaders.
An international monitoring team continues to watch over a four-year-old cease-fire agreement between the government and the separatist Moro Islamic Liberation Front (MILF). In June 2003, the MILF issued a formal renunciation of terrorism. Talks on a peace accord between the two sides continue, with the Government of Malaysia acting as principal mediator.
Principal Government Officials
President--Gloria Macapagal-Arroyo
Vice President--Noli De Castro
Foreign Secretary--Alberto Romulo
Ambassador to the United States--Ambassador
Willie Gaa
Permanent Representative to the UN--Hilario
G. Davide
The Republic of the Philippines maintains an embassy in the United States at 1600 Massachusetts Avenue NW, Washington, DC 20036 (tel. 202-467-9300). Consulates general are in New York, Chicago, San Francisco, Los Angeles, Honolulu, and Agana (Guam).
Economy
Philippines ECONOMY
Since the end of World War II, the
Philippine economy has had a mixed history of growth and development. Over
the years, the Philippines has gone from being one of the richest countries
in Asia (following Japan) to being one of the poorest. Growth immediately
after the war was rapid, but slowed over time. A severe recession in 1984-85
saw the economy shrink by more than 10%, and perceptions of political instability
during the Aquino administration further dampened economic activity. During
his administration, President Ramos introduced a broad range of economic
reforms and initiatives designed to spur business growth and foreign investment.
As a result, the Philippines saw a period of higher growth, but the Asian
financial crisis triggered in 1997 slowed economic development in the Philippines
once again. President Estrada managed to continue some of the reforms begun
by the Ramos administration. Important laws to strengthen regulation and
supervision of the banking system (General Banking Act) and securities
markets (Securities Regulation Code), to liberalize foreign participation
in the retail trade sector, and to promote and regulate electronic commerce
were enacted during his abbreviated term. Despite occasional challenges
to her presidency and resistance to pro-liberalization reforms by vested
interests, President Arroyo has made considerable progress in restoring
macroeconomic stability with the help of a well-regarded economic team.
Nonetheless, long-term economic growth remains threatened by widespread
poverty, crumbling infrastructure and education systems, and trade and
investment barriers.
Important sectors of the Philippine economy include agriculture and industry, particularly food processing; textiles and garments; and electronics and automobile parts. Most industries are concentrated in the urban areas around metropolitan Manila. Mining also has great potential in the Philippines, which possesses significant reserves of chromite, nickel, and copper. Significant natural gas finds off the islands of Palawan have added to the country's substantial geothermal, hydro, and coal energy reserves.
Today's Economy
GDP grew by 5.4% in 2006, marking
the first time since the 1970s with three consecutive years of growth over
5%. Historically, the Philippines has had difficulty sustaining growth
at over 5%. The GDP increased by 6% in 2004, a 15-year high, and by 5%
in 2005. Growth in 2006 was fueled by increased electronics exports, growth
in the outsourcing industry, and a 20% increase in remittances from overseas
workers to $12.8 billion and about 13% of the GDP. Still, it will take
a higher, sustained economic growth path to make more appreciable progress
in poverty alleviation given the Philippines' annual population growth
rate of 1.764%--one of the highest in Asia.
Exports totaled $47.2 billion in 2006, relying heavily on electronics shipments for about two-thirds of export revenues. Although there has been some improvement over the years, local value added of electronics exports remains relatively low at about 30%. Net foreign direct investment (FDI) inflow rose to $2.35 billion in 2006, nearly double the 2005 level. The U.S. remains the Philippines' largest trading partner with over $16 billion in two-way trade, and the largest investor with $6 billion in assets. Increased export revenue, investment inflows, and foreign remittances have helped produce a current account balance of $4.9 billion in 2006.
Increased foreign capital inflows made the Philippine stock market among the top performers in East Asia during 2006. Similarly, the Philippine peso appreciated about 7.5% to the U.S. dollar, making it East Asia's best performing currency in 2005-2006. The Philippines maintained reserves of foreign exchange and gold of $22.97 billion.
The Philippines was less severely affected by the Asian financial crisis of the late 1990s than its neighbors, aided in part by its high level of annual remittances from overseas workers, no sustained run-up in asset prices, and more moderate debt prior to the crises. Nonetheless, the Philippines' banking sector was not spared from high interest rates and non-performing asset (NPA) levels during the Asian financial crisis and its aftermath. Increases in minimum capitalization requirements, increasing loan-loss provisions, and generally healthy capital-adequacy ratios have helped temper systemic risk. The Special Purpose Vehicle (SPV) Act of January 2003, which provides time-bound fiscal and regulatory incentives to encourage the sale to private asset management companies, has helped to reduce banks' portfolios of non-performing assets. Under the SPV, universal and commercial banks were able to reduce their NPAs by 18% in 2006. Circumstances surrounding bank closures continue to highlight remaining impediments to more effective bank supervision and timely intervention--including stringent bank secrecy laws, obstacles preventing bank regulators from examining banks at will, and inadequate legal protection for Central Bank officials and examiners.
The government faces another important challenge in addressing threats to the long-term viability of state-run pension funds. The monetary authority's adoption since January 2002 of an inflation-targeting framework has enhanced transparency in the conduct of monetary policy. The inflation rate averaged 6.2% in 2006, down from 7.6% in 2005. Likewise, the government--which has targeted lower fiscal deficits since 2003 toward balancing the budget before the end of President Arroyo's term--contained the full-year 2006 budget deficit to 1% of GDP. However, the current 14.3% tax-to-GDP ratio remains well below the 17% peak ratio achieved in 1997.
The Aquino and Ramos administrations opened up the relatively closed Philippine economy and provided a firmer base for sustainable economic growth. After a slow start, President Estrada and his cabinet continued with, and expanded, liberalization and market-based policies and reforms. Efforts to reform the constitution to encourage foreign investment, particularly foreign ownership of land, were abandoned amidst nationalist opposition. Initial optimism about prospects for economic reform also had dimmed amid concerns of governmental corruption. Scandals involving the Philippine Stock Exchange, and the President's close ties to certain businessmen, shook the confidence of investors and the business community and ultimately led to successful efforts to impeach and remove President Estrada.
The Arroyo administration enacted an anti-money laundering law in September 2001 and followed through with amendments in March 2003 to address remaining legal concerns posed by the OECD Financial Action Task Force (FATF). The FATF removed the Philippines from its list of Non-Cooperating Countries and Territories in February 2005, noting the significant progress made to remedy concerns and deficiencies identified by the FATF to improve implementation. The Egmont Group, the international network of financial intelligence units, admitted the Philippines to its membership in June 2005.
Although encountering implementation hitches, the Arroyo administration also enacted legislation in 2001 to rationalize the electric power sector and privatize the government's debt-saddled National Power Corporation (NPC). The government has achieved some success in establishing an independent regulatory system for electricity pricing that will benefit NPC finances. In addition to the Special Purpose Vehicle law, President Arroyo also signed into law in 2003 a priority initiative to reform the government procurement system (the Government Procurement Reform Act). During the first quarter of 2004, she signed into law legislation to rationalize and plug leakages in the Philippines' convoluted documentary stamp tax system and encourage secondary trading of financial instruments, as well as legislation (the Securitization Act) towards establishing the necessary infrastructure and market environment for a wide range of asset-backed securities. She also signed legislation to institutionalize Alternative Dispute Resolution for civil cases to help address the problem of overburdened court dockets.
Notwithstanding a number of favorable policy developments, the Philippine economy continues to juggle extremely limited financial resources while attempting to meet the needs of a rapidly expanding population and to address intensifying demands for the current administration to deliver on its anti-poverty promises. Over 80% of the government budget is devoted to non-discretionary expenses (i.e., debt service, government salaries and benefits, and legally-mandated revenue transfers to local government units). The current high level of government debt, the substantial share of foreign obligations, the emerging risks posed by contingent liabilities (particularly those of the government's debt-saddled NPC), and the worrisome deterioration in the tax collection performance from the 1997 peak (still low by regional standards) have increased the country's vulnerability to severe external and domestic shocks. More recent reforms include laws increasing excise taxes on tobacco and liquor products and establishing a system of rewards and penalties in revenue collection agencies. An amended Value Added Tax (VAT) law, implemented in November 2005, reduced VAT exemptions and increased the VAT rate from 10% to 12%. This VAT reform boosted 2006 tax revenue by 22%, and, along with higher export receipts and the surge in remittances from overseas workers, helped bring the budget deficit under control.
The U.S. Trade Representative removed the Philippines from its Special 301 Priority Watchlist in 2006, reflecting improvement in its enforcement of intellectual property rights protection. Potential foreign investors, as well as tourists, continue to be concerned about law and order, inadequate infrastructure, and governance issues. While trade liberalization presents significant opportunities, intensifying global competition and the emergence of low-wage export economies also pose challenges. Competition from other Southeast Asian countries and from China for investment underlines the need for sustained progress on structural reforms to remove bottlenecks to growth, to lower costs of doing business, and to promote good public and private sector governance. The government has been working to reinvigorate its anti-corruption drive, and the Office of the Ombudsman has reported improved conviction rates. Nevertheless, the Philippines will need to do more to improve international perception of its anti-corruption campaign--an effort that will require strong political will and significantly greater financial and human resources.
Agriculture
Philippines Agriculture and Forestry
Arable farmland comprises more than
40% of the total land area. Although the Philippines is rich in agricultural
potential, inadequate infrastructure, lack of financing, and government
policies have limited productivity gains. Philippine farms produce food
crops for domestic consumption and cash crops for export. The agricultural
sector employs nearly 37% of the work force but provides less than one-fifth
of GDP.
Decades of uncontrolled logging and slash-and-burn agriculture in marginal upland areas have stripped forests, with critical implications for the ecological balance. The government has instituted conservation programs, but deforestation remains a severe problem.
With its 7,107 islands, the Philippines has a very diverse range of fishing areas. Notwithstanding good prospects for the agriculture subsector, the marine fishing industry continues to face a bleak future due to destructive fishing methods, a lack of funds, and inadequate government support.
Agriculture generally suffers from low productivity, low economies of scale, and inadequate infrastructure support. Agricultural output fell in 1997 and 1998 due to an El Niño-related drought but increased by 6.0% in 1999 (over 1998's low base). Growth reverted to more normal rates in 2000 (4.0%) and 2001 (3.7%). Agricultural output (affected by another, albeit milder, dry spell) expanded by 3.9% year-on-year in 2002 and 3.2% in 2003. Agricultural output increased by 5.1% in real terms during 2004 but stagnated to 2.24% in 2005 due to drought and intermittent weather disturbances. Despite the adverse affects of successive and very strong typhoons in the last four months of 2006, the overall annual farm output expanded by 3.9%.
Industry
Philippines Industry
Industrial production is centered
on the processing and assembly operations of the following: food, beverages,
tobacco, rubber products, textiles, clothing and footwear, pharmaceuticals,
paints, plywood and veneer, paper and paper products, small appliances,
and electronics. Heavier industries are dominated by the production of
cement, glass, industrial chemicals, fertilizers, iron and steel, and refined
petroleum products.
The industrial sector is concentrated in urban areas, especially in the metropolitan Manila region, and has only weak linkages to the rural economy. Inadequate infrastructure, transportation, and communication have so far inhibited faster industrial growth, although significant strides have been made in addressing the last of these elements.
Mining
The Philippines is one of the world's
most highly mineralized countries, with untapped mineral wealth estimated
at more than $840 billion. Philippine copper, gold, and chromite deposits
are among the largest in the world. Other important minerals include nickel,
silver, coal, gypsum, and sulfur. The Philippines also has significant
deposits of clay, limestone, marble, silica, and phosphate. The discovery
of natural gas reserves off Palawan has been brought on-line to generate
electricity.
Despite its rich mineral deposits, the Philippine mining industry is just a fraction of what it was in the 1970s and 1980s when the country ranked among the ten leading gold and copper producers worldwide. Low metal prices, high production costs, and lack of investment in infrastructure have contributed to the industry's overall decline. A December 2004 Supreme Court decision upheld the constitutionality of the 1995 Mining Act, thereby allowing up to 100% foreign-owned companies to invest in large-scale exploration, development, and utilization of minerals, oil, and gas.
Foreign
Philippines FOREIGN RELATIONS
In its foreign policy, the Philippines
cultivates constructive relations with its Asian neighbors, with whom it
is linked through membership in ASEAN, of which it will serve as Chair
until summer 2007; the ASEAN Regional Forum (ARF); and the Asia-Pacific
Economic Cooperation (APEC) forum. The Philippines is a member of the UN
and some of its specialized agencies, and served a two-year term as a member
of the UN Security Council from January 2004-2006, acting as UNSC President
in September 2005. Since 1992, the Philippines has been a member of the
Non-Aligned Movement. The government is seeking observer status in the
Organization of the Islamic Conference (OIC). The Philippines has played
a key role in ASEAN in recent years and also values its relations with
the countries of the Middle East, in no small part because hundreds of
thousands of Filipinos are employed in that region. The welfare of the
some eight million overseas Filipino workers is considered to be a pillar
of Philippine foreign policy. Foreign exchange remittances from these workers
exceed 12% of the country's gross domestic product.
The fundamental Philippine attachment
to democracy and human rights is also reflected in its foreign policy.
Philippine soldiers and police have participated in a number of multilateral
civilian police and peacekeeping operations, and a Philippine Army general
served as the first commander of the UN Peacekeeping Operation in East
Timor. The Philippines presently has peacekeepers in Haiti and Liberia.
The Philippines also participated in Operation Iraqi Freedom, deploying
some 50 troops to Iraq in 2003. (These troops were subsequently withdrawn
in 2004 after a Filipino overseas worker was kidnapped.) The Philippine
Government also has been active in efforts to reduce tensions among rival
claimants to the territories and waters of the resource-rich South China
Sea. '
US
U.S.-PHILIPPINE RELATIONS
U.S.-Philippine relations are based
on shared history and commitment to democratic principles, as well as on
economic ties. The historical and cultural links between the Philippines
and the U.S. remain strong. The Philippines modeled its governmental institutions
on those of the U.S. and continues to share a commitment to democracy and
human rights. At the most fundamental level of bilateral relations, human
links continue to form a strong bridge between the two countries. There
are an estimated four million Americans of Philippine ancestry in the United
States, and more than 250,000 American citizens in the Philippines.
Until November 1992, pursuant to the 1947 Military Bases Agreement, the United States maintained and operated major facilities at Clark Air Base, Subic Bay Naval Complex, and several small subsidiary installations in the Philippines. In August 1991, negotiators from the two countries reached agreement on a draft treaty providing for use of Subic Bay Naval Base by U.S. forces for 10 years. The draft treaty did not include use of Clark Air Base, which had been so heavily damaged by the 1991 eruption of Mount Pinatubo that the U.S. decided to abandon it.
In September 1991, the Philippine Senate rejected the bases treaty, and despite further efforts to salvage the situation, the two sides could not reach an agreement. As a result, the Philippine Government informed the U.S. on December 6, 1991, that it would have one year to complete withdrawal. That withdrawal went smoothly and was completed ahead of schedule, with the last U.S. forces departing on November 24, 1992. On departure, the U.S. Government turned over assets worth more than $1.3 billion to the Philippines, including an airport and ship-repair facility. Agencies formed by the Philippine Government have converted the former military bases for civilian commercial use, with Subic Bay serving as a flagship for that effort.
The post-U.S. bases era has seen U.S.-Philippine relations improved and broadened, with a prominent focus on economic and commercial ties while maintaining the importance of the security dimension. U.S. investment continues to play an important role in the Philippine economy, while a strong security relationship rests on the 1952 U.S.-Philippines Mutual Defense Treaty (MDT). In February 1998, U.S. and Philippine negotiators concluded the Visiting Forces Agreement (VFA), paving the way for increased military cooperation under the MDT. The agreement was approved by the Philippine Senate in May 1999 and entered into force on June 1, 1999. Under the VFA, the U.S. has conducted ship visits to Philippine ports and has resumed large combined military exercises with Philippine forces. Key events in the bilateral relationship include the July 4, 1996 declaration by President Ramos of Philippine-American Friendship Day in commemoration of the 50th anniversary of Philippine independence. Ramos visited the U.S. in April 1998,
