Country Paper: Philippines

Country Paper: Philippines

The Philippines is an island nation located in the Malay Archipelago in Southeast Asia, with Manila as its capital. It comprises 7,107 islands called the Philippine Archipelago, with a total land area of approximately 300,000 square kilometers or 116,000 square miles, making it the 72nd largest country by area. Modern day Filipinos are mostly of Austronesian ancestry, although there are a number of Filipinos with Spanish, Chinese, American, and Arab ancestry. Through its rich history, Philippine culture has many affinities with the West. Roman Catholicism is the predominant religion, and Filipino and English are the official languages (Wikipedia, 2006).

History

Miguel LÐ"Ñ-pez de Legazpi arrived from Mexico in 1565 and formed the first Spanish settlements, and paved the way for colonization. In 1571 he established Manila as the capital of the new Spanish colony.

The Spanish-American War began in Cuba in 1898 and soon reached the Philippines when Commodore George Dewey defeated the Spanish squadron at Manila Bay. Aguinaldo declared the independence of the Philippines on June 12, 1898, and was proclaimed head of state. As a result of its defeat in the War, Spain ceded the Philippines, together with Cuba, Guam and Puerto Rico to the United States. By 1899, the Philippine-American War ensued between the United States and the Philippine revolutionaries, which continued the violence of the previous years. The US proclaimed the war ended when Aguinaldo was captured by American troops on March 23, 1901, but the struggle continued until 1913. The country's status as a colony changed when it became the Commonwealth of the Philippines in 1935, which provided for more self-governance. Plans for increasing independence over the next decade were interrupted during World War II when Japan invaded and occupied the islands. After the Japanese were defeated in 1945, the Philippines achieved independence from the United States on July 4, 1946 (Wikipedia, 2006).

Government

The government of the Philippines is organized as a presidential-unitary republic, where the President functions as head of state, the head of government, and the commander-in-chief of the armed forces. The president is elected by popular vote to a six-year term, during which he or she appoints and presides over the cabinet of secretaries.

The bicameral Congress comprises the Senate and the House of Representatives; members of the former are elected at large and those of the latter by geographical district. The 24 senators serve six-year terms, with half retiring every three years, while the House of Representatives comprises 250 members serving three-year terms.

As of June 2006, President Gloria Macapagal-Arroyo is hoping to get agreement to amend the constitution to a unicameral parliament patterned after the Westminster model (at least according to the Lower House as of December 2006) under a federal setting similar to what they believe to be the German constitution. The country would be split into "states" with each one having a local legislature responsible for certain functions. Included in the amendments are plans to remove/ease the current ban on foreign ownership of property, land, and commercial organizations in the Philippines. Plans have been announced to decentralize government by moving departments from Manila to the provinces. (Wikipedia, 2006).

Major Obstacles

Insurgencies by various Islamic terrorist and separatist groups and the communist New People's Army pose a significant internal threat. In response to this situation and the global war on terrorism, the Armed Forces of the Philippines (AFP) has been restructured to combat domestic insurgencies, most of which are based on the southern island of Mindanao: the Moro Islamic Liberation Front (MILF), the Abu Sayyaf Group (ASG), Jemaah Islamiyah, and the Communist Party of the Philippines' New People's Army (NPA). In addition, the loyalty of the military to the government remains in doubt, following an unsuccessful coup by a renegade faction of the AFP in July 2003 (Library, 2006).

Income inequality remains persistent; about 30 million people lived on less than $2 per day in 2005. China and India have emerged as major economic competitors, siphoning away investors who would otherwise have invested in the Philippines, particularly telecom companies. Regional development is also somewhat uneven, with the main island Luzon and Metro Manila gaining most of the new economic growth at the expense of the other regions (Wikipedia, 2006).

Major business/industry/raw materials/infrastructure

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 (Bureau, 2006).

The production of consumer goods dominates the manufacturing sector. The leading industries are processed foods, followed by electrical machinery (mainly semiconductors), petroleum products, coal, chemical products, and garments. Energy: In 2004 the Philippines derived 42 percent of its energy from oil; 30 percent from biomass, solar, and wind; 12 percent from coal; 7 percent from geothermal; 5 percent from hydropower; and 4 percent from natural gas (Library, 2006).

Economic Condition

From a 0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in 2000, but slowed to 3.2% in 2001 in the context of a global economic slowdown, an export slump, and political and security concerns. GDP growth accelerated to about 5% between 2002 and 2006 reflecting the continued resilience of the service sector, and improved exports and agricultural output. Nonetheless, it will take a higher, sustained growth path to make appreciable progress in the alleviation of poverty given the Philippines' high annual population growth rate and unequal distribution of income. The Philippines also faces higher oil prices, higher interest rates on its dollar borrowings, and higher inflation. Fiscal constraints limit Manila's ability to finance infrastructure and social spending. The Philippines' consistently large budget deficit has produced a high debt level, and this situation has forced Manila to spend a large portion of the national government budget on debt service. Large unprofitable public enterprises, especially in the energy sector, contribute to the government's debt because of slow progress