Philippines

PHILIPPINES

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS FILIPINOS
DEPENDENCIES
BIBLIOGRAPHY

Republic of the Philippines

Republika ng Pilipinas

CAPITAL: Manila

FLAG: The national flag consists of a white equilateral triangle at the hoist, with a blue stripe extending from its upper side and a red stripe extending from its lower side. Inside each angle of the triangle is a yellow five-pointed star, and in its center is a yellow sun with eight rays.

ANTHEM: Lupang Hinirang (also known as Bayang Magiliw [Nation Beloved] ).

MONETARY UNIT: The peso (p) is divided into 100 centavos. There are coins of 1, 5, 10, 25, and 50 centavos and 1 and 2 pesos, and notes of 5, 10, 20, 50, 100, and 500 pesos. p1 = $0.01815 (or $1 = p55.1) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard, but some local measures also are used.

HOLIDAYS: New Year's Day, 1 January; Freedom Day, 25 February; Labor Day, 1 May; Heroes' Day, 6 May; Independence Day (from Spain), 12 June; Thanksgiving, 21 September; All Saints' Day, 1 November; Bonifacio Day, 30 November; Christmas, 25 December; Rizal Day, 30 December; Last Day of the Year, 31 December. Movable religious holidays include Holy Thursday and Good Friday.

TIME: 8 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

The Republic of the Philippines consists of an archipelago of 7,107 islands situated se of mainland Asia and separated from it by the South China Sea. The total land area is approximately 300,000 sq km (115,831 sq mi), 67% of which is contained within the two largest islands: Luzon, 108,171 sq km (41,765 sq mi) and Mindanao, 99,078 sq km (38,254 sq mi). Other large islands include Samar, Negros, Palawan, Panay, Mindoro, Leyte, Cebu, Bohol, and Masbate. Comparatively, the area occupied by the Philippines is slightly larger than the state of Arizona. The Philippines' length is 1,851 km (1,150 mi) ssennw, and its width is 1,062 km (660 mi) enewsw.

The Philippines is separated from Taiwan on the n by the Bashi Channel (forming part of the Luzon Strait) and from Sabah, Malaysia (northern Borneo), on the sw by the Balabac Strait (off Palawan) and the Sibutu Passage (off the Sulu Archipelago). Bordering seas include the Philippine Sea and the Pacific Ocean on the e, the Celebes Sea on the S, the Sulu Sea on the sw, and the South China Sea on the w. The Philippines has a total coastline of 36,289 km (22,549 mi).

The Philippines claims the Spratly Islands, in the South China Sea, as do China, Malaysia, Taiwan, and Vietnam. About 1,000 Philippine marines were stationed in the Spratlys in 1983. The Philippines also has a claim on Sabah, dating back to 1670.

The Philippines' capital city, Manila, is located on the island of Luzon.

TOPOGRAPHY

The topography is extremely varied, with volcanic mountain masses forming the cores of most of the larger islands. The range culminates in Mt. Pulog (elevation 2,928 m/9,606 ft) in northern Luzon and in Mt. Apo, the highest point in the Philippines (elevation 2,954 m/9,692 ft), in Mindanao. A number of volcanoes are active, and the islands have been subject to destructive earthquakes. On 16 July 1990, a 7.7 magnitude earthquake occurred on Luzon causing the death of 1,621 people; it was recorded as the strongest earthquake that year worldwide. A 6.5 magnitude earthquake occurred in Samar on 18 November 2003, causing structural damage to buildings and roads, but few injuries. Another 6.5 magnitude tremor occurred in Mindoro on 8 October 2004.

Lowlands are generally narrow coastal strips except for larger plains in Luzon (Cagayan Valley and Central Plains), Mindanao (Cotabato and Davao-Agusan valleys), and others in Negros and Panay. Rivers are short and generally seasonal in flow. Important ones are the Cagayan, Agno, Abra, Bicol, and Pampanga in Luzon and the Cotabato and Agusan in Mindanao. Flooding is a frequent hazard. The shores of many of the islands are embayed (Manila Bay is one of the finest harbors in East Asia); however, several islands lack adequate harbors and require offshore lightering for sea transport. The only two inland water bodies of significant size are Laguna de Bay in Luzon and Lake Sultan Alonto in Mindanao.

CLIMATE

The Philippine Islands, in general, have a maritime tropical climate and, except in the higher mountains, temperatures remain warm, the annual average ranging from about 23° to 32°c (73 to 90°f) throughout the archipelago. Daily average temperatures in Manila range from a minimum of 21°c (70°f) to a maximum of 30°c (86°f) in January and from 24°c (75°f) to 33°c (91°f) in June. Annual normal relative humidity averages 80%. Rainfall and seasonality differ markedly throughout the islands, owing to varying exposures to the two major wind belts, northeast trades or monsoon (winter) and southwest monsoon (summer). Generally, the east coasts receive heavy winter rainfall and the west coasts heavy summer rainfall. Intermediate and southern locales receive lesser amounts more equally distributed. The average annual rainfall in the Philippines ranges from 96 to 406 cm (38 to 160 in).

FLORA AND FAUNA

The Philippines supports a rich and varied flora with close botanical connections to Indonesia and mainland Southeast Asia. Forests cover almost one-half of the land area and are typically tropical, with the dominant family, Dipterocarpaceae, representing 75% of the stands. The forest also has vines, epiphytes, and climbers. Open grasslands, ranging up to 2.4 m (8 ft) in height, occupy one-fourth of the land area; they are man-made, the aftermath of the slash-and-burn agricultural system, and most contain tropical savanna grasses that are nonnutritious and difficult to eradicate. The diverse flora includes 8,000 species of flowering plants, 1,000 kinds of ferns, and 800 species of orchids.

There are over 150 species of mammals, with common mammals including the wild hog, deer, wild carabao, monkey, civet cat, and various rodents. There are about 196 breeding species of birds, among the more numerous being the megapodes (turkey-like wildfowl), button quail, jungle fowl, peacock pheasant, dove, pigeon, parrot, and hornbill. Reptilian life is represented by 190 species; there are crocodiles and the larger snakes include the python and several varieties of cobra.

ENVIRONMENT

Primary responsibility for environmental protection rests with the National Pollution Control Commission (NPCC), under whose jurisdiction the National Environmental Protection Council (NEPC) serves to develop national environmental policies and the Environmental Center of the Philippines implements such policies at the regional and local levels.

Uncontrolled deforestation in watershed areas, with consequent soil erosion and silting of dams and rivers, constitutes a major environmental problem, together with rising levels of air and water pollution in Manila and other urban areas. The NPCC has established standards limiting automobile emissions but has lagged in regulating industrial air and water pollution. In 2000, carbon dioxide emissions totaled 77.5 million metric tons.

The nation has 479 cu km of renewable water resources, with 88% of the annual withdrawal used to support farming and 4% used for industrial activity. Pollution has also damaged the coastal mangrove swamps, which serve as important fish breeding grounds. Between the 1920s and 1990s, the Philippines lost 70% of its mangrove area. In 2000, about 19% of the total land area was forested. About 50% of the nation's coral reefs are rated dead or dying as a result of pollution and dynamiting by fishermen. The nation is also vulnerable to typhoons, earthquakes, floods, and volcanic activity.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 50 types of mammals, 70 species of birds, 8 types of reptiles, 48 species of amphibians, 49 species of fish, 3 types of mollusks, 16 species of other invertebrates, and 212 species of plants. Threatened species in the Philippines included the monkey-eating eagle, Philippine tarsier, tamarau, four species of turtle (green sea, hawksbill, olive ridley, and leatherback), Philippines crocodile, sinarapan, and two species of butterfly. The cebu warty pig, Panay flying fox, and Chapman's fruit bat have become extinct.

POPULATION

The population of Philippines in 2005 was estimated by the United Nations (UN) at 84,765,000, which placed it at number 12 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 35% of the population under 15 years of age. There were 101 males for every 100 females in the country. According to the UN, the annual population rate of change for 200510 was expected to be 2.3%, a rate the government viewed as too high. The projected population for the year 2025 was 115,675,000. The overall population density was 283 per sq km (732 per sq mi), but the population is unevenly distributed, being most densely concentrated in Luzon and the Visayan Sea islands.

The UN estimated that 48% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.70%. Metropolitan Manila, the capital, had a population of 10,352,000 in that year. Created in 1975, metropolitan Manila includes four citiesManila proper, Quezon City, Caloocan City, and Pasay Cityand 13 surrounding municipalities. Other major cities include Davao, Cebu, Zamboanga, Bacolod, Cagayan de Oro, and Iloilo.

MIGRATION

The rapid growth of the Philippine population has led to considerable internal migration. On Luzon, frontier-like settlements have pushed into the more remote areas. The Mindoro and Palawan islands also have attracted numerous settlers, and hundreds of thousands of land-hungry Filipinos have relocated to less densely populated Mindanao. There also has been a massive movement to metropolitan Manila, especially from central Luzon. Emigration abroad is substantial. To reduce domestic unemployment, over 500,000 Philippine citizens were working abroad in the late 1980s and early 1990s, mainly in the Middle East, but also in Hong Kong and Singapore. Emigration to the United States particularly has been considerable: As of the 2000 US census, 1,369,070 Americans, or. 85% of US population, residing chiefly in California and Hawaii claimed only Filipino ancestry. In 2004, 143 Filipinos sought asylum in Canada.

As of 1998, there were still 1,589 asylum seekers from Vietnam in a Palawan camp, who were refused refugee status but allowed to stay pending a repatriation solution. Distinctions between Indochinese and other nationalities have been dropped, and all are now referred to as urban refugees. Many refugees became legal exiles while studying in the Philippines following political or military upheavals in their homelands; a majority have since married Filipino nationals. The number of migrants in 2000 was 160,000. As of 2004, the Philippines hosted 107 urban refugees, 44 asylum seekers, and 1,829 Vietnamese of concern as rejected cases. In 2005, the net migration rate was -1.49 migrants per 1,000 population. The government views the emigration level as too high, but the immigration level as satisfactory. In 2003 remittances to the Philippines were $8 billion.

ETHNIC GROUPS

Filipinos of Malay (Malayan and Indonesian) stock constitute about 95.5% of the total population. They are divided into nine main ethnic groups: the Tagalog, Ilocanos, Pampanguenos, Pangasinans, and Bicolanos, all concentrated in Luzon; the Cebuanos, Boholanos, and Ilongos of the Visayas; and the Waray-Waray of the Visayas, Leyte, and Samar. The largest single group is the Tagalog, accounting for about 28% of the total population. The Cebuano is the next largest group, representing about 13% of the population. Numerous smaller ethnic groups inhabit the interior of the islands, including the Igorot of Luzon and the Bukidnon, Manobo, and Tiruray of Mindanao. There are small groups of Chinese and Muslims.

LANGUAGES

There are two official languages: Filipino (based on Tagalog), the national language adopted in 1946 and understood by a majority of Filipinos; and English, which is also widely spoken and understood. Spanish, introduced in the 16th century and an official language until 1973, is now spoken by only a small minority of the population. More than 80 indigenous languages and dialects (basically of Malay-Indonesian origin) are spoken. Besides Tagalog, which is spoken around Manila, the principal dialects include Cebuano (spoken in the Visayas), Ilocano (spoken in northern Luzon), and Panay-Hiligaynon. The teaching of Filipino is mandatory in public and private primary schools, and its use is encouraged by the government.

RELIGIONS

Most of the population (about 81%) belong to the Roman Catholic Church. Other Christian churches represent about 11.6% of the population and include such denominations as Seventh-Day Adventist, United Methodist, United Church of Christ, Assemblies of God, the Church of Jesus Christ of Latter-Day Saints, and Philippine Baptist (associated with Southern Baptist). In addition, there are three churches established by Filipino religious leaders, the Independent Church of the Philippines, also called Aglipayan; the Iglesia ni Cristo (Church of Christ); and the Ang Dating Daan (an offshoot of the Church of Christ). Muslims represent about 5% of the population and are commonly called Moros by non-Muslims. They are concentrated in Mindanao and the Sulus. Most Muslims are Sunni. Buddhists make up less than 1% of the population. There are also small communities of Hindus and Jews. It is believed that a majority of the indigenous population includes elements of native religions within their practice of other faiths.

Freedom of religion and the separation of church and state is guaranteed by the constitution. In an effort to reduce tensions between Christians and Muslims in the southern islands and to answer Muslim autonomist demands, the government established an Office of Muslim Affairs in 1981 and allocated funds for Islamic legal training and for Muslim schools and cultural centers. Part of its role, as of 1999, involved coordinating the travel of pilgrims to Mecca, Saudi Arabia, and coordinating diplomatic ties with countries that have contributed to Mindanao's economic development and to the "peace process" with insurgent groups. The National Ecumenical Consultative Committee is a government-sponsored group that encourages interfaith dialogue. Certain Christian holidays are recognized as national holidays.

TRANSPORTATION

The total length of roadways in 2002 was 202,124 km (125,721 mi), of which only 19,202 km (11,944 mi) were paved. Luzon contains about one-half of the total road system, and the Visayas about one-third. There were 796,385 passenger cars and 1,774,300 commercial vehicles registered in 2003.

In 2004, the Philippine railroad system consisted of 897 km (557 mi) of common-carrier narrow gauge railroad track on Luzon and Panay. However, the system only plays a minor role in transportation, since only 492 km (306 mi) were in operation. As of 2004, there were 3,219 km (2,000 mi) of waterways, but their use is limited to vessels with a draft of less than 1.5 m (4.5 ft).

Water transportation is of paramount importance for inter-island and intra-island transportation. A small offshore fleet registered under the Philippine flag is engaged in international commerce, but most ocean freight is carried to and from the Philippines by ships of foreign registry. In 2005, the merchant fleet numbered 419 ships of 1,000 GRT or more, totaling 4,524,259 GRT. There are 25 major ports. Manila is the busiest Philippine port in international shipping, followed by Cebu and Iloilo. Other ports and harbors include Batangas, Cagayan de Oro, Davao, Guimaras Island, Iligan, Jolo, Legaspi, Masao, Puerto Princesa, San Fernando, Subic Bay, and Zamboanga.

In 2004 there were an estimated 255 airports. As of 2005 a total of 83 had paved runways, and there were also two heliports. Ninoy Aquino International Airport, formerly Manila International Airport, is the principal international air terminal. Five other airports serve international flights as well. Philippine Air Lines (PAL), the national airline, provides domestic and international flights. Under the Aquino government there were plans to sell PAL stock to the private sector. In 2003, about 6.467 million passengers were carried on scheduled domestic and international airline flights.

HISTORY

Evidence of human habitation dates back some 250,000 years. In more recent times, experts believe that the Negritos, who crossed then existing land bridges from Borneo and Sumatra some 30,000 years ago, settled the Philippine Islands. Successive waves of Malays, who arrived from the south, at first by land and later on boats called barangaysa name also applied to their communitiescame to outnumber the Negritos. By the 14th century, Arab traders made contact with the southern islands and introduced Islam to the local populace. Commercial and political ties also linked various enclaves in the archipelago with Indonesia, Southeast Asia, India, China, and Japan. Ferdinand Magellan, a Portugueseborn navigator sailing for Spain, made the European discovery of the Philippines on 15 March 1521 and landed on Cebu on 7 April, claiming the islands for Spain, but the Filipino chieftain Lapulapu killed Magellan in battle. The Spanish later named the islands in honor of King Philip II, and an invasion under Miguel Lopez de Legaspi began in 1565. The almost complete conversion of the natives to Christianity facilitated the Spanish conquest; by 1571, it was concluded, except for the Moro lands (Moro is the Spanish word for Moor). The Spanish gave this name to Muslim Filipinos, mostly inhabitants of southern and eastern Mindanao, the Sulu Archipelago, and Palawan. The Spanish administered the Philippines, as a province of New Spain, from Mexico. Trade became a monopoly of the Spanish government; galleons shipped Oriental goods to Manila, from there to Acapulco in Mexico, and from there to the mother country.

Although Spain governed the islands until the end of the 19th century, its rule was constantly threatened by the Portuguese, the Dutch, the English (who captured Manila in 1762, occupying it for the next two years), the Chinese, and the Filipinos themselves. After the 1820s, which brought the successful revolts of the Spanish colonies in the Americas, Filipinos openly agitated against the government trade monopoly, the exactions of the clergy, and the imposition of forced labor. This agitation brought a relaxation of government controls: the colonial government opened ports to world shipping, and the production of such typical Philippine exports as sugar, coconuts, and hemp began. Filipino aspirations for independence, suppressed by conservative Spanish rule, climaxed in the unsuccessful rebellion of 189698. Jose Rizal, the most revered Filipino patriot, was executed, but Gen. Emilio Aguinaldo and his forces continued the war. During the Spanish-American War (1898), Aguinaldo declared independence from Spain on 12 June. When the war ended, the United States acquired the Philippines from Spain for $20,000,000. US rule replaced that of the Spanish, but Philippine nationalists continued to fight for independence. In 1899, Gen. Aguinaldo became president of the revolutionary First Philippine Republic and continued guerrilla resistance in the mountains of northern Luzon until his capture in 1901, when he swore allegiance to the United States. Over the long term, the effect of US administration was to make the Philippines an appendage of the US economy, as a supplier of raw materials to and a buyer of finished goods from the American mainland. Politically, US governance of the Philippines was a divisive issue among Americans, and the degree of US control varied with the party in power and the US perception of its own security and economic interests in the Pacific. In the face of continued nationalist agitation for independence, the US Congress passed a series of bills that ensured a degree of Philippine autonomy. The Tydings-McDuffie Independence Law of 1934 instituted commonwealth government and further stipulated complete independence in 1944. In 1935, under a new constitution, Manuel Luis Quezon y Molina became the first elected president of the Commonwealth of the Philippines.

On 8 December 1941, Japan invaded the Philippines, which then became the focal point of the most bitter and decisive battles fought in the Pacific during World War II. By May 1942, the Japanese had achieved full possession of the islands. US forces, led by Gen. Douglas MacArthur, recaptured the Philippines in early 1945, following the Battle of Leyte Gulf, the largest naval engagement in history. In September 1945, Japan surrendered. On 4 July 1946, Manuel A. Roxas y Acuna became the first president of the new Republic of the Philippines. Both casualties and war damage wreaked on the Philippines were extensive, and rehabilitation was the major problem of the new state. Communist guerrillas, called Hukbalahaps, threatened the republic. Land reforms and military action by Ramon Magsaysay, the minister of national defense, countered the Huks revolutionary demands. Magsaysay was elected to the presidency in 1953 but died in an airplane crash in 1957. Carlos P. Garcia succeeded Magsaysay and then won election to the office in 1958. Diosdado Macapagal became president in November 1961. He was succeeded by Ferdinand Edralin Marcos following the 1965 elections. Marcos was reelected in 1969 with a record majority of 62%. The Marcos government brutally suppressed the renewed Hukbalahap insurgency, but armed opposition by Muslim elements, organized as the Moro National Liberation Front (MNLF), the Maoist-oriented New People's Army (NPA), and by other groups gathered force in the early 1970s.

Unable under the 1935 constitution to run for a third term in 1973, President Marcos, on 23 September 1972, placed the entire country under martial law, charging that the nation was threatened by a "full-scale armed insurrection and rebellion." Marcos arrested many of his more vehement political opponents, some of whom remained in detention for several years. In January 1973, the Marcos administration introduced a new constitution, but many of its provisions remained in abeyance until 17 January 1981, when Marcos finally lifted martial law. During the intervening period, Marcos consolidated his control of the government through purges of opponents, promotion of favorites, and delegation of leadership of several key programsincluding the governorship of metropolitan Manila and the Ministry of Human Settlementsto his wife, Imelda Romualdez Marcos. Although Marcos made headway against the southern guerrillas, his human-rights abuses cost him the support of the powerful Roman Catholic Church, led by Jaime Cardinal Sin. Elections were held in April 1978 for an interim National Assembly to serve as the legislature until 1984, but local elections held in 1980 were widely boycotted. Pope John Paul II came to Manila in February 1981, and even though martial law was no longer in effect, he protested the violation of basic human rights. In June 1981, Marcos won reelection for a new six-year term as president under an amended constitution preserving most of the powers he had exercised under martial rule. New threats to the stability of the regime came in 1983 with the rising foreign debt, a stagnant economy, and the public uproar over the assassination on 21 August of Benigno S. Aquino, Jr. Aquino, a longtime critic of Marcos, was shot at the Manila airport as he returned from self-exile to lead the opposition in the 1984 legislative elections. The gunman was immediately killed, and 26 others suspected of conspiracy in the assassination were acquitted in December 1985 for lack of evidence. Public sympathy gave opposition parties 59 out of 183 elective seats in 1984.

In 1985, political pressures forced Marcos to call for an election in February 1986 in view of a widespread loss of confidence in the government. The Commission on Elections and the National Assembly, controlled by his own political party, proclaimed Marcos the winner. His opponent, Maria Corazon Cojuangco Aquino, the widow of Benigno S. Aquino, claimed victory, however, and charged the ruling party with massive election fraud. The National Movement for Free Elections, the United States, and other international observers supported Aquino's charge. Accordingly, other countries withheld recognition of Marcos. On 21 February 1986, a military revolt grew into a popular rebellion, urged on by Jaime Cardinal Sin. US president Ronald Reagan gave Marcos an offer of asylum, which Reagan guaranteed only if Marcos left the Philippines without resistance. Marcos went into exile in Hawaii.

After Marcos

On 25 February 1986, Corazon Aquino assumed the presidency. Her government restored civil liberties, released political prisoners, and offered the NPA a six-month cease-fire, with negotiations on grievances, in exchange for giving up violence. Because Aquino came to power through the forced departure of an officially proclaimed president, the legality of her regime was suspect. Consequently, she operated under a transitional "freedom constitution" until 11 February 1987, when the electorate ratified a new constitution. On 11 May 1987 the first free elections in nearly two decades were held under the new constitution. More than 83% of eligible voters cast their ballots, 84 candidates ran for the 24 senate seats, and 1,899 candidates ran for the 200 house seats. There were 63 election-related killings. Old-line political families still controlled the system, as 169 House members out of the 200 elected either belonged to or were related to these families.

On 20 December 1987 one of the worst disasters in maritime history occurred when an overcrowded passenger ship collided with an oil tanker off Mindoro Island and at least 1,500 people perished. This delayed local elections until 18 January 1988. Nationwide 150,000 candidates ran for 16,000 positions as governor, vice governor, provincial board member, mayor, vice mayor, and town council member. In 1988 election-related violence killed more than 100 people. Members of the pro-government parties, a faction of the PDP-Laban and Lakas ng Bansa, formed a new organization, Laban ng Demokratikong Pilipino (LDP) in June 1988. In March 1989 the thrice-postponed election for barangay officials was held, electing some 42,000 barangay captains. In August 1989 President Aquino signed a law giving limited autonomy to provinces where most Philippine Muslims lived: Mindanao, Palawan, Sulu, and Tawi-Tawi islands.

There were five coup attempts between the time Aquino took office and the end of 1987. This continuing succession of coup plots culminated in a large, bloody, well-financed attempt in December 1989. Led by Colonel Gregorio Honasan (who participated in the 1987 coup attempt, and was a close associate of Senator Juan Ponce Enrile) and involving more than 3,000 troops that targeted several bases; US air support helped to quelled this attempt. The Senate granted Aquino emergency powers for six months. President Aquino's administration lost international credibility with the appeal for US military support to quell the coup attempt. The authorities made arrests, but the Supreme Court ruled that Senator Juan Ponce Enrile could not be charged with murder, nullifying a criminal case against him. He was charged in a lower court with rebellion. In September 1990, 16 military members were convicted of the assassination of Senator Benigno Aquino in 1983 and sentenced to life in prison.

Former president Ferdinand Marcos had appealed to Aquino to allow him to attend the funeral of his mother, as he had appealed several times to visit his mother while she was ill; Aquino denied each request. The Philippine government had traced at least $5 billion in deposits to Swiss bank accounts made by Marcos. Marcos attempted to negotiate his return to the Philippines, promising his support for Aquino and the return of $5 billion to the Philippines. Aquino also rejected his wife Imelda's plea for her husband's return. The Philippine government filed an antigraft civil suit for $22.6 billion against Marcos in 1987. Marcos and his wife, Imelda, were indicted in the United States, charged with the illegal transfer of $100 million in October 1988. On 28 September 1989 former President Ferdinand Marcos died in Honolulu. Aquino refused to allow his burial in the Philippines.

Under pressure from Communist rebels Aquino removed the US military bases from the Philippines in 1989. Three US servicemen were murdered outside Clark Air Force Base and the Communists took responsibility for the murders. A Communist guerrilla who admitted participating in the 21 April 1989 assassination of US Army Colonel James Row was arrested. In September 1989 US vice president Dan Quayle met with Aquino to discuss the renewal of the lease on US military bases. Prior to his arrival two American civilians working on the bases were killed; the government attributed these deaths to Communist guerrillas. The Communists continued to threaten US servicemen and local politicians. Anti-American demonstrations at Clark Air Base and in Manila led to clashes with the police and to injuries. The Communists continued their threats and two more US servicemen were killed near the Clark Air Base. In June of 1990 the Peace Corps removed 261 volunteers from the Philippines after Communist threats against them. In September 1990 Aquino said it was time to consider an "orderly withdrawal" of US forces from the Philippines.

Within a year the Philippines was pummeled with three major natural disasters. In July 1990 an earthquake measuring 7.7 on the Richter scale struck. The epicenter was 55 mi north of Manila and more than 1,600 people were killed. A super-typhoon devastated the central Visayas in November 1990. An even more destructive natural disaster occurred on 12 June 1991 when Mount Pinatubo in Zambales province, a volcano dormant for more than 500 years, violently erupted, causing the abandonment of Clark Air Base in Angeles City; 20,000 US military, their dependents, and civilian employees evacuated to the United States from Clark and the Subic Bay Naval Station.

The Philippine-American Cooperation Talks (PACT) reached agreement on military base and nonbase issues, but Philippine Senate refused to ratify the proposed treaty. On 6 January 1992 the Philippines government served notice of the termination of the US stay at Subic Naval Base in Zambales. After almost a century of US military presence, on 30 September 1992 the United States handed over Subic Naval Base to the Philippines. The Philippine government turned it into a free port, headed until 1998 by Dick Gordon.

Amnesty International (AI), the human rights organization, published a report in 1992 critical of the Aquino administration's assent to human rights violations perpetrated by the military; AI alleged that 550 extra judicial killings occurred during 198891. The military refuted the AI report citing its oversight of rebel activities.

In March 1991 President Aquino stated that Imelda Marcos could return to the Philippines, but that she faced charges that her husband stole $10 billion during his 20 years as president. Mrs. Marcos returned in November, after five years in Hawaii, to face civil and criminal charges, including tax fraud. In January 1992 Imelda Marcos announced that she would run for election in 1992; in the same month she was arrested, and then released, for failing to post bail on charges that she unlawfully maintained accounts in Switzerland. In September 1993 the government permitted the embalmed body of Ferdinand Marcos to return to the Philippines for burial near his home in northern Luzon. On 24 September 1993 Imelda Marcos was found guilty of participating in a deal that was "disadvantageous to the government" under the Anti-Graft and Corruption Practices Act. She faced a maximum prison sentence of 24 years, but she remained free on bail while her appeal was considered.

In national and local elections held 11 May 1992, Fidel V. Ramos and Joseph E. Estrada were elected president and vice president, respectively. On 30 June 1992 Fidel Ramos succeeded Corazon Aquino as president of the Philippines with a plurality of 23.6%. Nearly 85% of eligible voters turned out to elect 17,205 officials at national, regional, and local levels. The election was relatively peaceful with only 52 election-related deaths reported. Rules required voters to write the names of the candidate they wanted for office. This, combined with the number of candidates, meant it was several weeks before the votes were completely tallied. Ramos, a Methodist and the Philippine's first non-Catholic president, considered the country's population growth rate as an obstacle to development. A rally of 300,000 Catholics led by Cardinal Sin took place in Manila in 1993 to protest the Ramos administration's birth control policies and the public health promotion of prophylactics to limit the spread of AIDS.

Domestic insurgency by the Muslim population continued throughout the 1980s. By the 1990s, however, internal divisions among the Muslims, reduced external support, military pressure, and government accommodations, including the creation of the Autonomous Region in Muslim Mindanao in 1990 had greatly reduced the threat. In January 1994 the government signed a ceasefire agreement with the Moro National Liberation Front, ending 20 years of guerrilla war. Splinter groups among the Muslim population continue, however, to cause difficulties for both the MNLF and the government.

The last remaining communist insurgency in Asia was reduced temporarily by the Ramos government's peaceful signal, the 1992 Anti-Subversion Law, and the 1993 split in the ranks of the NPA that created a lull until issues related to the weakened leadership were resolved. The NPA returned to violent opposition sporadically throughout the 1990s, especially by the Revolutionary Proletarian Army, an offshoot of the NPA. The NPA significantly increased its use of children as armed combatants and noncombatants during this same time.

In January 1994 the congress passed a law restoring the death penalty for 13 crimes including treason, murder, kidnapping and corruption. Police reform was a particular goal of the legislation. This legislation was partly in response to a series of abductions of wealthy ethnic Chinese Filipinos abducted for ransom, in which the Philippine National Police were found to be involved.

Conflicting claims to the Spratly Islands in the South China Sea are a source of tension between the Philippines and the People's Republic of China. In 1989 Chinese and Philippine warships exchanged gunfire in the vicinity of the Spratly Islands. The incident was resolved by diplomatic means. In June 1994 China protested an oil exploration permit granted to Vaalco Energy of the United States, and to Alcorn Petroleum and Minerals, its Philippine subsidiary. The Philippine response was to refer to a principle of "common exploration" and development of the Spratlys. China had employed this same principle when the Philippines had protested China's granting the United States permission to explore in the Spratlys in 1993. China, Vietnam, Taiwan, the Philippines, Malaysia, and Brunei all lay claim to all, or a portion, of the Spratly Islands. In June 1994 a 5-day conference on East Timor held in Manila ended with an agreement to establish a coalition for East Timor in the Philippines and proposed a peace plan based on the gradual withdrawal of Indonesian troops. But turmoil in the Spratlys did not end. In 1995, China briefly occupied Mischief Reef in a part of the islands claimed by the Philippines. In spring of 1997, Chinese warships were seen near Philippine-occupied islands in the chain. The two countries have also traded occupation of Scarborough Shoal, heightening tensions and prompting Manila to seek renewed American military presence. In May 1999 the Philippine Senate ratified a new Visiting Forces Agreement with the United States, despite claims by opponents that the VFA would give the US military the opportunity to bring nuclear weapons, without declaration, into the Philippines, violating the Philippine constitution.

The issue of Filipino women forced to work abroad, long a controversy in the country's large impoverished class, came to a head in 1995. In March, Filipina domestic worker Flor Contemplacion was executed in Singapore for the murder of a maid and a child. Outraged Filipinos claimed the girl was framed; they filled the streets of Manila in protest. The crisis, the product of unemployment and underemployment forcing families to export their children to low-wage overseas jobs, culminated in Mr. Ramos's sacking of two cabinet ministers.

In January 1996, Philippines police uncovered and thwarted a plot by Islamic extremists to assassinate Pope John Paul II during his visit to Manila that month.

Muslim rebels in Mindanao continued their insurgencies against the government, raiding the trading town of Ipil in April 1996. The terrorists killed 57 people and burned the town's business district. The rebels also took part in the resurgence of kidnappings and bank robberies in Manila and Mindanao. More than 100 kidnappings were reported in 1996, many in which police officers were also suspected. A peace agreement between the Philippine government and the MNLF was signed on 2 September 1996, that ended the 24-year-old war in Mindanao. The agreement was signed by the government chief negotiator Manuel Yan, Nur Misuari, Indonesian Foreign Minister Ali Alatas, and Secretary General Hamid Algabid of the Organization of Islamic Conference (OIC). Later, Misuari ran for and won the governorship of the Autonomous Region for Muslim Mindanao (ARM) in the 9 September 1996 elections.

The Philippine economy suffered a harsh blow in 1995 when a typhoon ravaged the rice harvest, trebling the destruction of the rice acreage lost to the Mount Pinatubo eruption. But the economy rebounded in late 1995 and through 1996, buoyed by the government's massive infrastructure improvements and plans to develop former US military bases Subic Bay and Clark Air Force Base as tourist attractions and economic zones.

President Ramos introduced the Philippines 2000 movement, which was both a strategy and a movement; he called it the Filipino people's vision of development by the year 2000. As envisioned, the Philippines by the year 2000 would have a decent minimum of food, clothing, shelter, and dignity. The major goal of Philippines 2000 was to make the Philippines the next investment, trade, and tourism center in Asia and the Pacific. The Ramos administration achieved several of its economic goals but few of the social changes envisioned.

On 30 June 1998 the newly elected President, Joseph Ejercito Estrada, took office. The new Vice President was Gloria Macapagal-Arroyo. In November 2000, impeachment proceedings began against Estrada on allegations of corruption, betrayal of the public trust, and violation of the constitution. Estrada stepped down as president on 20 January 2001 after months of protests, and Arroyo was sworn in as president. Estrada in April 2001 was charged with taking more than us$80 million from state funds while in office; he was arrested and placed in custody. Arroyo faced a sluggish economy upon coming into office; the economy was still recovering from the 199798 Asian financial crisis. She initiated privatization and deregulation policies, especially in agriculture and the power-generating industry. On 30 December 2002, Arroyo declared she would not seek a second term in the 16 May 2004 presidential elections, so that she could focus on her economic reform agenda, restore peace and order, reduce corruption, and "heal political rifts." Despite this promise, she did participate in the 2004 presidential elections.

The separatist conflict on Mindanao had claimed more than 140,000 lives in three decades as of 2005. In March 2001, the 12,500-member Moro Islamic Liberation Front declared a ceasefire and declared it was ready to hold talks with the government. However, on 11 February 2003, more than 2,000 government soldiers advanced toward an MILF base near Pikit, attempting to disband a group of kidnappers known as the "Pentagon gang," which is on the list of US terrorist organizations. Approximately 135 MILF fighters were killed in three days of fighting. In January 2002, nearly 700 US troops, including 160 Special Forces soldiers, were sent to Mindanao to assess the military situation, provide military advice, and train the 7,000 Philippine soldiers pursuing the guerrillas of the Abu Sayyaf group operating in the southern islands of Basilan and Jolo. The Philippine constitution forbids foreign troops fighting on its territory.

Following the 11 September 2001 terrorist attacks on the United States, the United States urged countries around the world to increase antiterrorist measures they might take. Southeast Asia was a primary focus of attention. In May 2002, the 10 members of ASEAN pledged to form a united antiterror front and to set up a strong regional security framework. The steps include introducing national laws to govern the arrest, investigation, prosecution, and extradition of suspects. As well, they agreed to exchange intelligence information and to establish joint training programs such as bomb detection and airport security.

The militant Islamic group Abu Sayyaf ("Bearer of the Sword") is one of several guerrilla organizations involved in a resurgence of violence in the Philippines since 2000. It split off from the Moro National Liberation Front (MNLF) in 1991 to pursue a more fundamentalist course against the government. Actions taken since the early 1990s include bombings, assassinations, and kidnappings of priests and businessmen. One of its goals is an independent Islamic state in Mindanao, but its activities have been linked to international terrorism as well, including ties to Osama bin Laden's al-Qaeda network, according to the US government. In May 2001, Abu Sayyaf kidnapped 20 people, including 3 Americans, demanding ransom. They beheaded one of the American captives, and held the othersa missionary couplehostage. In June 2002, Philippine commandos attempted to rescue the couple and a Filipino nurse being held with them. Two of the hostages were killed in a shootout, and one of the missionaries was freed. In August, Abu Sayyaf kidnapped six Filipino Jehovah's Witnesses and beheaded two of them. The group also claims responsibility for two bombings in Dabao City in 2003 which killed 38 people. In addition to Abu Sayyaf, a new Islamic insurgent group, Jemaah Islamiyah is believed to be training recruits in the southern Philippines, which is dedicated to the establishment of an Islamic theocracy in Southeast Asia. Financial links have been found between Abu Sayyaf, Jemaah Islamiyah and al-Qaeda.

The 2004 presidential elections were extremely close. Arroyo was able to retain the presidency with 40% of the vote to Fernando Poe Jr. with 37%. However, the Philippines continued to be plagued by accusations of corruption in the government, business arena and security forces. President Arroyo is credited with increasing economic (GDP) growth, 4.3% in 2002 to 4.7% in 2003 and to about 6% in 2004, but there are substantial criticisms levied against her government. Intense poverty remained a central problem in the Philippines as do counterinsurgency groups like the MNLF, Abu Sayyaf, Jemaah Islamiyah and the communist New People' s army. Steady unemployment contributes to the intense poverty with the 2005 rate exceeding 12%. Despite Arroyo's efforts, trafficking of women and children still remained a prominent issue.

GOVERNMENT

Under the constitution of 11 February 1987 the Philippines is a democratic republican state. Executive power is vested in a president elected by popular vote for a six-year term, with no eligibility for reelection. The president is assisted by a vice president, elected for a six-year term, with eligibility for one immediate reelection, and a cabinet, which can include the vice president. Legislative power rests with a bicameral legislature. Congress consists of a senate, with 24 members elected for six-year terms (limited to two consecutive terms). Senators are chosen at large. Senators must be native-born Filipinos and at least 35 years old. A house of representatives is elected from single-member districts for three-year terms (limited to three consecutive terms). Districts are reapportioned within three years of each census. In 2004, 212 members were elected. Up to 52 more may be appointed by the president from "party lists" and "sectoral lists," but the constitution prohibits the house of representatives from having more than 250 members. Representatives must be native-born Filipinos and at least 25 years of age. Presidential and legislative elections are next scheduled for May 2007.

POLITICAL PARTIES

The first Philippine political party, established in 1900, was the Federal Party, which advocated peace and eventual statehood. Later, the Nationalist Party (NP) and the Democratic Party were established. They did not produce an actual two-party system, since the Nationalists retained exclusive control and the Democrats functioned as a "loyal opposition." However, following Japanese occupation and the granting of independence, an effective two-party system developed between the Liberal Party (LP) and the NP. The Progressive Party, formed in 1957 by adherents of Ramon Magsaysay, polled more than one million votes in the presidential election of 1958. In the elections of November 1965, Senator Ferdinand Marcos, the NP candidate, received 55% of the vote. In the 1969 election, he was elected to an unprecedented second term. All political activity was banned in 1972, following the imposition of martial law, and was not allowed to resume until a few months before the April 1978 elections for an interim National Assembly. The Marcos government's New Society Movement (Kilusan Bagong Lipunan-KBL) won that election and the 1980 and 1982 balloting for local officials, amid charges of electoral fraud and attempts by opposition groups to boycott the voting. The principal opposition party was the People's Power Movement-Fight (Lakas Ng Bayan-Laban), led by Benigno S. Aquino, Jr., until his assassination in 1983. This party joined with 11 other opposition parties in 1982 to form a coalition known as the United Nationalist Democratic Organization (UNIDO). Following Aquino's murder, some 50 opposition groups, including the members of the UNIDO coalition, agreed to coordinate their anti-Marcos efforts. This coalition of opposition parties enabled Corazon Aquino to campaign against Marcos in 1986. In September 1986 the revolutionary left formed a legal political party to contest congressional elections. The Partido ng Bayan (Party of the Nation) allied with other left-leaning groups in an Alliance for New Politics. This unsuccessful attempt for electoral representation resulted in a return to guerrilla warfare on the part of the Communists.

After assuming the presidency, Aquino formally organized the People's Power Movement (Lakas Ng Bayan), the successor to her late husband's party. In the congressional elections of May 1987, Aquino's popularity gave her party a sweep in the polls, making it the major party in the country. Marcos's KBL was reduced to a minor party. Some of its members formed their own splinter groups, such as the Grand Alliance for Democracy (GAD), a coalition of parties seeking distance from Marcos. Others revived the LP and the NP, seeking renewed leadership. The left-wing People's Party (Partido Ng Bayan), which supports the political objectives of the NPA, was a minor party in the elections. In May 1989 Juan Ponce Enrile reestablished the Nacionalista Party. A new opposition party, the Filipino Party (Partido Pilipino), organized in 1991 as a vehicle for Aquino's estranged cousin Eduardo "Danding" Cojuangco's presidential campaign. He ran third in the election, taking 18.1% of the vote, behind Miriam Defensor Santiago with 19.8% of the vote. On 30 June 1992 Fidel Ramos succeeded Corazon Aquino as president of the Philippines with a plurality of 23.6%. In September 1992 Ramos signed the Anti-Subversion Law signaling a peaceful resolution to more than 20 years of Communist insurgency, with the repeal of the antisubversion legislation in place since 1957. On 26 August 1994 Ramos announced a new political coalition that would produce the most powerful political group in the Philippines. Ramos' Lakas-National Union of Christian Democrats (Lakas/NUCD) teamed with the Democratic Filipino Struggle (Laban ng Demokratikong Pilipino, Laban). Following the 1995 elections, the LDP controlled the Senate with 14 of the 24 members. The elections in 1998 changed the political landscape once more. In the Senate the newly created Laban Ng Masang Pilipino, led by presidential candidate, Joseph Estrada, captured 12 seats to the Lakas 5, PRP 2, LP 1, independents 3. The LAMP party also dominated the House of Representatives with 135 seats to the Lakas 37, LP 13, Aksyon Demokratiko 1, and 35 independents.

Political parties and their leaders in 2002 included: Kilusang Bagong Lipunan (New Society Movement), led by Imelda Marcos; Laban Ng Demokratikong Pilipino (Struggle of Filipino Democrats) or LDP, led by Eduardo Angara; Lakas, led by Jose De Venecia; Liberal Party or LP, led by Florencio Abad; Nacionalista Party, led by Jose Oliveros; National People's Coalition or NPC, led by Eduardo Cojuangco; PDP-Laban, led by Aquilino Pimentel; and the People's Reform Party or PRP, led by Miriam Defensor-Santiago.

The elections in 2004 again changed the political landscape dramatically. The senate became a majority Lakas with 7 seats, LP with 3 seats, KNP (coalition) with 3 seats, independents with 4 seats, others with 6 seats (there were 23 rather than 24 sitting senators because one senator was elected Vice President) Fourteen senators were pro-government, 9 were in opposition. Lakas also were a majority in the House of Representatives with 93 seats, NPC with 53, LP with 34, LDP with 11, and others with 20.

LOCAL GOVERNMENT

Under the constitutions of 1935, 1973, and 1987, the country has been divided into provinces, municipalities, and chartered cities, each enjoying a certain degree of local autonomy. Each of the 73 provinces and subprovinces elects a governor, a vice-governor, and two provincial board members for terms of six years. There are 61 chartered cities headed by a mayor and a vice-mayor. Chartered cities stand on their own, are not part of a province, do not elect provincial officials, and are not subject to provincial taxation, but have the power to levy their own taxes. Municipalities, of which each province is composed, are public corporations governed by municipal law. There are approximately 1,500 municipalities, and within each municipality are communities (barangays ), each with a citizens' assembly. There are about 42,000 barangays.

The 1987 constitution provides for special forms of government in the autonomous regions created in the Cordilleras in Luzon and the Muslim areas of Mindanao. Any region can become autonomous by a referendum. The Local Government Code of 1991 provided for a more responsive and accountable local-government structure. Local governments are to be given more powers, authority, responsibilities and resources through a system of decentralization.

JUDICIAL SYSTEM

Under the 1973 constitution, the Supreme Court, composed of a chief justice and 14 associate justices, was the highest judicial body of the state, with supervisory authority over the lower courts. The entire court system was revamped in 1981, with the creation of new regional courts of trials and of appeals. Justices at all levels were appointed by the president. Philippine courts functioned without juries. Delays in criminal cases were common, and detention periods in national security cases were long. Security cases arising during the period of martial law (197281) were tried in military courts. The 1987 constitution restored the system to what it had been in 1973. Despite the reinstitution of many procedural safeguards and guarantees, the slow pace of justice continues to be a major problem.

The national court system consists of four levels: local and regional trial courts; a national Court of Appeals divided into 17 divisions; the 15-member Supreme Court; and an informal local system for arbitrating or mediating certain disputes outside the formal court system. A Shariah (Islamic law) court system, with jurisdiction over domestic and contractual relations among Muslim citizens, operates in some Mindanao provinces. Supreme Court justices may hold office, on good behavior, until the age of 70.

The constitution calls for an independent judiciary and defendants in criminal cases are afforded the right to counsel. The legal system is based on both civil and common law. It is especially influenced by Spanish and Anglo-American laws. The Philippines accepts the compulsory jurisdiction of the International Court of Justice.

The government allows free press although several journalists have been killed in revenge for reporting on crimes committed by local authorities.

An informal local system for arbitrating or mediating certain problems operates outside the formal court system. There is no jury system. Defendants enjoy a presumption of innocence and have the right to confront witnesses, to present evidence and to appeal.

Issues affecting women, such as rape, domestic violence and sexual discrimination continued to be problematic although banned by law. Drug trafficking, forced labor and child prostitution continued to be problems for the law enforcement community.

The Philippines is a member of many international organizations including the United Nations and the World Trade Organization.

ARMED FORCES

The Philippines' armed forces had 106,000 active personnel in 2005, with reserves of 131,000. The Army had 66,000 active personnel that included eight light infantry divisions and five engineer battalions. Equipment included 65 Scorpion light tanks, 85 armored infantry fighting vehicles, 370 armored personnel carriers, and more than 282 artillery pieces. The Navy had an estimated 24,000 personnel (including 7,500 Marines) and an aviation arm. Major naval units included 1 frigate and 58 patrol/coastal vessels. The naval aviation arm was outfitted with six fixed wing transport aircraft and four utility helicopters. The Air Force had an estimated strength of 16,000, with 21 combat capable aircraft that included 11 fighter aircraft. The service also had 25 assault helicopters. Paramilitary forces consisted of a Coast Guard, the 40,500-member Philippine National Police and the 40,000 reservist Citizen Armed Force Geographical Units. The defense budget in 2005 totaled $844 million.

The Philippines sent troops and observers to participate in UN missions in five countries.

INTERNATIONAL COOPERATION

The Philippines is a charter member of the United Nations, having joined on 24 October 1945, and belongs to ESCAP and several nonregional specialized agencies, such as the FAO, ILO, UNESCO, UNHCR, UNIDO, the World Bank, IAEA, and the WHO. The Philippines is a member of ASEAN and led in the formation of the Asian Development Bank, which opened its headquarters in Manila in 1966. The nation is also a member of APEC, the Colombo Plan, G-24, G-77, and the WTO. It has observer status in the OAS

The Philippines is part of the Nonaligned Movement. The government has offered support to UN missions and operations in Kosovo (est. 1999), Liberia (est. 2003), East Timor (est. 2002), and Burundi (est. 2004), among others. In environmental cooperation, the Philippines is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, the London Convention, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.

ECONOMY

Efforts to transform the Philippine economy from a primarily agricultural producer of crops for subsistence and export to a more diversified growth economy led by manufactured exports commanding more favorable terms of trade like its Asian tiger neighbors have been repeatedly hindered by natural disasters and external economic shocks. In 199091 the islands suffered the triple blow of earthquake, super-typhoon, and volcanic eruption. In succession, there were the even more devastating typhoon of 1995, the Asian financial crisis of 1997, and the global economic slowdown of 2001. In 2005, 14.8% of GDP was in agriculture, 31.7% in industry, and 53.5% in services. In 2004, 36% of the labor force was engaged in agriculture, compared with 16% in industry and 48% in services.

The manufacturing sector, though expanded and diversified since political independence, depends on imported raw materials and cannot supply internal needs. Electronics and telecommunications exports, which grew by double digits in the 1990s and had accounted for at least 75% of export revenues in 1999, proved vulnerable to the worldwide slowdown in consumer demand in the recession of 2001, and the contraction by half in foreign investment as a result of the 11 September 2001 terrorist attacks on the United States.

The Philippines has great potential as a tourist destination. However, since the early 1990s the tourist industry has, in addition to natural disasters and high fuel costs, been afflicted with political difficulties, particularly with the emergence of the Abu Sayyaf (Bearers of the Sword) Islamic fundamentalist group. Tourism receipts peaked in 1997 at close to $3 billion, but in 2000 were less than $2 billion.

Though the Philippine economy had a real GDP growth rate in 2001 of 3.4%, down from 4.8% in 2000, this positive showing was due primarily to a 4% growth in agriculture, and in spite of a 15% fall in exports, and 61.1% decline in its trade surplus (to $2.6 billion) compared to 2000. For the first three quarters of 2002, the government reported growth in all three sectors, with services leading at 5.1% increase over 2001, industry second, at 3.8% growth, and agriculture at 2.3%. The improvement in services is ascribed to liberalization and deregulation that have encouraged innovations in telecommunications, retail, transportation and financing. The Malampaya natural gas project is central to industrial performance, while agriculture suffered from adverse weather conditions.

Widespread unemployment and underemployment plague the labor market. In 2002, the unemployment rate was 10.3% and the underemployment rate was 15.9%. High rates of labor migration abroad provide some relief and accounts for a substantial portion of the country's foreign exchange earnings.

Throughout the 1990s the shortage of electric power was a notorious constraint on the economy. In Manila, the industrial hub, power outages lasted from four to six hours per day. In 2000, in its Philippine Energy Plan (PEP) the government set as a goal 100% electrification by 2004. Consumer price protection was provided by the Price Act of 1992 through the stabilization of the price of basic necessities and prime commodities and by measures against undue price increases during emergency situations. In 1993 the inflation rate continued to decline and real economic growth accelerated through the beginning of 1997, before the onset of the Asian financial crisis in August. As measured by the consumer price index (CPI), inflation peaked in 1998 at 9.7%, but had declined to 4.4% in 2000. There was an increase to 6.1% in 2001. Between 1993 and 1999, the Philippine government liberalized telecommunications, deregulated transportation, privatized water, and resolved the power crisis.

Real GDP growth averaged 3% from 1988 to 1998, peaking at 5.3% in 1997 and bottoming out in 1998 at 0.4%. From 1999 to 2002 real growth averaged close to 4%. Over the 200105 period, real GDP growth averaged 4.3%, and stood at 4.9% in 2005. GDP growth was forecast at 4.7% for 2006, but lower oil prices and higher global trade growth in 2007 were projected to allow GDP growth to accelerate to 5%. By year-end 2005, confidence in the Philippine economy had returned, as there had been a 70.5% year-on-year increase in FDI inflows into the country in January to August 2005.

The economy is marked by many disparitiesin ownership of assets, in income, in levels of technology in production, and in the geographic concentration of economic activity. The National Capital Region (NCR), centered on Manila, contains 14% of the population and produces one-third of GDP. Per capita income in the NCR, the richest region of the country, is roughly nine times that of the poorest region, the four provinces forming the Muslim autonomous region in Mindanao. In 2000, the richest 10% of the population had an income 23 times that of the poorest 10%. Those living in poverty were estimated at 39.4% of the population in 2000, with the rate in rural areas standing at 46.9%. The poverty rate in the NCR was only 12.7%.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 the Philippines's gross domestic product (GDP) was estimated at $451.3 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $5,100. The annual growth rate of GDP was estimated at 4.7%. The average inflation rate in 2005 was 7.9%. It was estimated that agriculture accounted for 14.8% of GDP, industry 31.7%, and services 53.5%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $7.880 billion or about $97 per capita and accounted for approximately 9.9% of GDP. Foreign aid receipts amounted to $737 million or about $9 per capita and accounted for approximately 0.9% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Philippines totaled $55.18 billion or about $677 per capita based on a GDP of $79.3 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 3.7%. In 2001 it was estimated that approximately 37% of household consumption was spent on food, 11% on fuel, 1% on health care, and 14% on education. It was estimated that in 2001 about 40% of the population had incomes below the poverty line.

LABOR

The Philippines had a labor force estimated at 36.73 million in 2005. As of 2004, agriculture accounted for 36% of the nation's workforce, with 16% working in industry, and 48% in the services sector. In 2005, the unemployment rate was estimated at 12.2% of the workforce.

In May 1974, the government passed a new labor code that restructured the trade union movement on a one-industry, one-union basis. Most of the more than 3,700 trade unions are small; industrial unions have been united in the Philippines Trade Union Congress, and agricultural workers in the Federation of Free Farmers. Strikes are prohibited in such essential services as transportation, communications, and health care. In 2001, about 11% of the labor force was unionized, although only 2% were covered by collective bargaining agreements. While the right to strike and bargain are recognized by law, numerous instances of intimidation of union officials have been reported.

In 2002, the average legal daily minimum wage was $5.60 for nonagricultural workers. This does not provide a family with a decent living standard. Perhaps as many as one-fifth of businesses in the Philippines does not pay the minimum wage. Agricultural wages are even lower, at a minimum of $2.60 per day. The minimum working age is 15, although children even younger may work under the supervision of a parent or guardian. In practice, many children work in the informal economy, although serious efforts are being made by the government to reduce the number of children who are working.

AGRICULTURE

About one-third of the total land area is classified as arable. Three-fourths of the cultivated area is devoted to subsistence crops and one-fourth to commercial crops, mainly for export. Farms tend to be small, and many areas are double-cropped. Soils are generally fertile, but 30% of the agricultural land is suffering erosion.

In 1973, the Marcos government began a land-reform program that undertook to transfer landowners to about half of the country's 900,000 tenant farmers. By February 1986, over one-half of the areaabout 600,000 hectares (1,482,600 acres)had not been distributed. The Aquino administration proposed a program in two stages: the first, covering 1.5 million hectares (3.7 million acres) in 198789, involved previously undistributed land and other land held by the state; the second, covering 3.9 million hectares (9.6 million acres) in 199092, involved land cultivating sugar, coconuts, and fruits. A more detailed 199095 plan sought to increase productivity of small farms, maintain self-sufficiency in rice and corn production, and to increase the agricultural sector's role in the trade balance.

Roughly half the cultivated land is devoted to the two principal subsistence crops, palay (unhusked rice) and corn. Production of palay was 14,497,000 tons in 2004; long-term production has increased, mainly through the use of high-yielding hybrid seeds under a government development program begun in 1973. The Philippines attained self-sufficiency in rice in 1974 and became a net exporter of rice for the first time in 1977. A similar development plan was aimed at raising yields of corn, which is the chief food crop in areas unsuitable for rice-growing and is increasingly important as feed for use in the developing livestock and poultry industries. The Philippines has been self-sufficient in corn for human consumption since the late 1970s, but since production of animal feed lags behind the demand, imports are still necessary. Corn output in 2004 was 5,413,000 tons. Lesser crops include peanut, mango, cassava, camote, tomato, garlic, onion, cabbage, eggplant, calamansi, rubber, and cotton.

Commercial agriculture, dominated by large plantations, centers on coconuts and copra, sugarcane, tobacco, bananas, and pineapples. Coconuts are the most important export crop, accounting for 26% of world production; in 2004, 14,345,000 tons were produced. Copra production, in which the Philippines leads the world, rose from 1,470,000 tons in 1965 to an estimated 2,250,000 tons in 2004/05. As oil milling capacity rose, the domestic market for copra expanded, accounting for almost all of the output and leaving only marginal amounts for exportation. The government put a ban on copra exports in March 1983, but it was lifted in March 1986. Sugarcane production provided the country's single largest export item until 1978, when output and prices fell. Production was 28 million tons in 2004 (compared with an annual average of 31.5 million tons during 197981). Pineapple production rose to 1,759,000 tons in 2004; production of coffee was 101,000 tons, and 5,638,000 tons of bananas were produced that year. Other important cash crops in 2004 included mangos, 968,000 tons; tobacco, 48,000 tons; and rubber, 96,000 tons.

ANIMAL HUSBANDRY

Animal husbandry never has been important, meat consumption being very low. The carabao, or water buffalo, are the principal draft animals, particularly in the rice paddies; hogs are the chief meat animals (except in Muslim sections). The Philippines is self-sufficient in pork and poultry, but imports of beef and dairy products are still necessary. In 2005 there were 12.1 million hogs, 6.5 million goats, 3.2 million buffaloes, 2.6 million head of cattle, and 136 million chickens. Meat production in 2005 included (in thousands of tons): pork, 1,100; chicken, 647; beef from cattle, 175; and goat, 35. Dairy production totaled 13,000 tons from cows in 2005; and eggs, 545,000 tons. The livestock and poultry sectors each contribute about 13% to the total value of agricultural production. In 2004, exports of livestock, meat, and skins were valued at nearly $7.6 million.

FISHING

Fish is the primary source of protein in the Filipino diet. Some 2,000 species abound in Philippine waters. Despite more than a doubling in output since the 1960s, the fishing industry remains relatively undeveloped, and large quantities of fish are imported. The Bureau of Fisheries and Aquatic Resources (BFAR) cites the continued environmental degradation of Philippine waters as a major constraint on fish production. In 2003, the total domestic fish catch was 2,169,164 tons (11th in the world), and aquacultural production amounted to 459,615 tons. Exports of fish products in 2003 were valued at $428.2 million.

Six species are most important, according to BFAR, because each has yielded 100,000 tons per year or more since the mid-1980s. These species are: sardines, roundscad, frigate tuna, anchovies, milkfish, and tilapia. Indian mackerel, skipjack and yellowfin tuna, sea bass, red snapper, mullet, kawakawa, squid, and prawn are also plentiful. Principal commercial fishing grounds are off Palawan, north of Panay and Negros, and to the south and west of Mindanao. Subsistence fishing is conducted throughout the archipelago. Fish ponds, chiefly for cultivation of bangos or milkfish, are principally in the swampy coastal areas of western Panay and around Manila Bay. Pearl shells (including cultured pearls), sponges, sea cucumbers (trepang), shark fins, and sea turtles are exported.

FORESTRY

Forests are an important economic resource in the Philippines. As of 2000, remaining forests occupy 5,789,000 hectares (14,300,000 acres), equivalent to 19.4% of the total Philippine land area. Major commercial forest reserves are located in Mindanao, Luzon, Samar, Negros, and Palawan. Areas devoted to industrial tree plantations in 2000 were estimated at 753,000 hectares (1,860,000 acres). Some 28,000 hectares (69,000 acres) were reforested in 2000, 21% by the private sector.

A series of devastating typhoons and the ensuing mudslides in central Luzon in December 2004 revealed the seriousness of both legal and illegal deforestation, prompting the government to review existing forestry laws. Applications to operate new sawmills have been suspended since 2003, as most sawmills had been utilizing illegally acquired logs. As a result, the output of logs, lumber, veneer, and plywood has been in decline since then.

Roundwood production in 2004 was estimated at 15.8 million cu m (557.7 million cu ft). Production of lumber in 2004 was estimated at 295,000 cu m (10.4 million cu ft); wood pulp, 175,000 tons; and plywood, 310,000 cu m (10.9 million cu ft). In the early 1980s, the Philippines was a significant exporter of tropical hardwood logs and lumber, but production fell by over 50% over the decade, leaving the country a net importer of tropical hardwood logs by 1990. The trade deficit for forest products was $518.4 million in 2004.

Among other forest products are bamboo, rattan, resins, tannin, and firewood.

MINING

The mining and quarrying sector continued to decline in importance, accounting for about 2% of the country's gross domestic product (GDP) of $77.1 billion in 2002. Production for much of the last quarter of the 20th century was slowed by political instability, declining foreign investment, low international prices, high operation and production costs, labor problems, an inadequate mining law, and natural disasters such as earthquakes, volcanic eruptions, landslides, tsunamis, typhoons, floods, and drought. Nevertheless, the Philippines ranked second in the Asia-Pacific region, after Indonesia, in terms of mineral prospectivity and resources. The Philippines reportedly had the world's largest source of refractory chromite, from Masinloc, and substantial resources of copper, gold, nickel, and silver. The production of chemicals and petroleum refining were leading industries in 2002.

Copper output was estimated at 20,414 metric tons (metal content) in 2003, up from 18,364 metric tons in 2002. Mined gold output was estimated at 37,840 kg in 2003, with mined nickel output estimated at 27,000 metric tons in 2003, up from 24,148 metric tons in 2002. The Philippines also produced sizable quantities of metallurgic chromite. Chromite ore production totaled an estimated 2,600 metric tons (gross weight) in 2003, up from 20,000 metric tons in 2002. Silver was also produced for export. The industrial mineral sector was dominated by the production of limestone, marble, and sand and gravel. In 2003, the Philippines also produced bentonite, hydraulic cement, clays (including red and white), feldspar, lime, perlite, phosphate rock, pyrite and pyrrhotite (including cuprous), marine salt, silica sand, stone (including dolomite, volcanic cinder, tuff, quartz), and sulfur. No guano phosphate was produced in 1999 and 2000, or in 2003.

Exploitation of the Philippines' potentially rich mineral resources has been stimulated somewhat by the Mining Act of 1995, which was designed to promote the mining industry to the international community and to provide incentives to ensure efficiency and economic viability for mining endeavors. The law also aimed to help the domestic mining industry regain its competitiveness by allowing companies (contractors) to obtain an exploration permit for a specific area for up to four years. For a viable deposit, the code provided four production agreementsproduction sharing, co-production, joint venture, or financial/technical assistancewith a duration of up to 50 years. A serious accident in 1996 involving spilled mine tailings from a copper mine on Marinduque led the government to freeze almost all applications for exploration licenses by foreign companies for one year. Through 2000, 59 exploration permits had been issued, and more than 400 applications were pending. The mining industry employed 400,000 people300,000 of them engaged in small-scale mining and panning activities, chiefly in artisanal gold workings.

ENERGY AND POWER

The Philippines has modest reserves of oil, but more robust reserves of natural gas that could make the country a significant producer. The country is also the second-largest producer of geothermal power in the world.

As of 1 January 2004, the Philippines had proven oil reserves of 152 million barrels. In 2003, oil production averaged an estimated 26,000 barrels per day, of which 25,000 barrels per day consisted of crude oil. Domestic demand for petroleum products in 2003 however, far outstripped production, In that year, demand averaged an estimated 338,000 barrels per day, necessitating imports averaging an estimated 312,000 barrels per day. Crude oil refining capacity, as of 1 January 2004, was estimated at 333,000 barrels per day. However, as of October 2004, refineries in the Philippines were reported to be operating at 80% capacity. In 2004, refining in the country was dominated by three companies: Petron; Pilipinas Shell; and Caltex (Philippines), of which Petron is the largest. Petron's Limay, Bataan refinery can process 180,000 barrels per day of crude oil. Pilipinas Shell's refinery has a capacity of 153,000 barrels per day. Caltex (Philippines) closed its 6,000 barrel per day refining facility in late 2003, a year ahead of schedule, to make way for a storage and distribution facility.

The Philippines, as of 1 January 2004, had proven natural gas reserves estimated at 3.6 trillion cu ft. Of that amount, 2.6 trillion cu ft were contained in the Malampaya field, located in the South China Sea, off the island of Palawan. Plans by the Philippine government call for using the field's gas to fuel three power plants with a combined electric generating capacity of 2,700 MW and displacing 26 million barrels of oil. In 2002, domestic demand and output of natural gas were each estimated at 70.6 billion cu ft.

The Philippines had recoverable coal reserves estimated at 366 million short tons, as of 2002. In that same year, coal production was estimated at 1.9 million short tons, with demand placed at 5.7 million short tons. Imports in that same year came to 3.8 million short tons. However, coal's share of the Philippines' energy mix has been declining, due in large part to the development of new natural gas projects.

As of 1 January 2002, the Philippines had an electric generating capacity estimated at 13.4 million kW, of which geothermal energy contributed about 14.2% and conventional thermal-fired plants about 67%. Hydroelectric capacity accounted for around 18.7%. Total electrical output in 2002 was estimated at 45.6 billion kWh, of which 61.9% was from fossil fuels, 15.8% from hydropower, and the rest from geothermal sources. Geothermal energy, is produced on Luzon, Leyte, and Negros. Consumption of electricity in 2002 was estimated at 42.4 billion kWh. Large hydroelectric plants have been installed on the Agno and Angat rivers on Luzon and at María Cristina Falls on the Agusan River in Mindanao.

INDUSTRY

In 2001 employment in industry decreased by 86,000 since 2000, or by 1.8%, and its share of total employment declined 1.2%. In this same period there was a 7.4% increase in agricultural employment and a 0.6% increase in agriculture's share of the economy. These statistics reflect the setbacks the Philippines has encountered in its long-run strategy of converting to a more diversified economy with growth led by high value-added manufactured exports. These problems were aggravated by the global economic recession that began in 2001 and the aftershocks of the 11 September 2001 terrorist attacks on the United States. Over half of the value of Philippine exports in 2000 were accounted for by information technology (IT) products, which were particularly affected by the global recession.

Exports of electronics first surpassed food products and textiles in value in the late 1990s, as the government sought to shift from an economy based on agricultural produce and sweatshop factory output to an economy anchored by the assembly of computer chips and other electronic goods, many of them computer peripherals. Over 50 chip assemblers and computer components makers have invested in Philippine operations. Technology companies with major investments in the Philippines include Intel, Philips, Acer, Toshiba, Hitachi, Fujitsu, Cypress Semiconductor, and Amkor Technology. In a 1999 World Bank study, the Philippines was credited with one of the world's most technologically advanced export structures.

A promising development was a major natural gas discovery in the Malampaya field, formally inaugurated in 2001 with the completion of a 312 mile (504 km) sub-sea pipeline and the conversion of three power plants in Batangas to natural gas usage. In the Philippine Energy Plan (PEP) 200009 the government envisioned domestic energy production increasing to over 50% self-sufficiency from about 42% self-sufficiency in 2001. Oil production has not been promising: in 2001 only 2.3% of the oil consumed was produced in the Philippines. The Malampaya Deepwater Gas-to-Power Project has shifted the government focus to an emphasis on the development of natural gas resources.

By value, the leading industries are textiles, pharmaceuticals, chemicals, wood products, food processing, petroleum products, electrical machinery, electronics assembly, petroleum refining, and fishing, with significant production in transport equipment, nonmetallic mineral products, fabricated metal products, beverages, rubber products, paper and paper products, leather products, publishing and printing, furniture and fixtures, and tobacco. The industrial production growth rate in 2005 was 0.5%.

The industrialization strategy proposed by the government in 1981 stressed development of exports and the accelerated implementation of 11 major industrial projectsa copper smelter, a phosphate fertilizer plant, an aluminum smelter, a diesel-engine manufacturing plant, an expansion of the cement industry, a "cocochemical" complex (based on coconuts), an integrated pulp and paper mill, a petrochemical complex, heavy engineering industries, an integrated steel mill, and the production of "alcogas." The copper smelter, the phosphate fertilizer plant, and the "cocochemical" complex went into operation in 1985. Historically, manufacturing production has been geographically concentrated in the Metro Manila area and the adjoining regions of Southern Tagalog and Central Luzon. With the progress in electrification, this geographic concentration has begun to decrease. Most industrial output is concentrated in a relatively few large firms. Although small and medium-sized businesses account for about 80% of manufacturing employment, they account for only about 25% of the value-added in manufacturing. In 2005, industry accounted for 31.7% of GDP.

SCIENCE AND TECHNOLOGY

Leadership in formulating and implementing national science policy is exercised by the Department of Science and Technology. Special training in science is offered by the Philippine Science High School, whose graduates are eligible for further training through the department's scholarship program. The International Rice Research Institute in Los Banos, founded by the Rockefeller and Ford foundations and US AID in 1960, conducts training programs in the cultivation, fertilization, and irrigation of hybrid rice seeds. The Southeast Asian Regional Center for Graduate Study and Research in Agriculture maintains genotype and information banks for agricultural research.

The Philippine Nuclear Research Institute, founded in 1958, is located in Quezon City. The French Institute of Scientific Research for Development and Cooperation has an institute in Manila conducting research in molecular biology. In 1996, the Philippines had 68 universities and colleges offering courses on basic and applied sciences. In 198797, science and engineering students accounted for 14% of college and university enrollments. In the same period, research and development expenditures amounted to 0.22% of GNP. For the period 19902001 there were 156 scientists and engineers and 22 technicians engaged in research and development per million people. In 2002, high-tech exports were valued at $11.488 billion and accounted for 65% of manufactured exports.

DOMESTIC TRADE

The archipelagic structure of Philippine marketing requires the establishment of regional centers and adds considerably to distribution costs, foreign domination of much of marketing, direct government participation, and the proliferation of small firms. About 90% of all imported goods come through the Port of Manila. Makati City is the business center of the country and hosts a number of distribution centers, trading firms, commercial banks, and high-end retail establishments. Cebu City is the trading center of the south.

Small stores typify retail trade. Manila has major shopping centers and malls. Generally, sales are for cash or on open account. Retailing is conducted on a high markup, low-turnover basis. A law provides for price-tagging on retail items. Direct marketing, particularly of foreign name-brand products, has gained in popularity. English is the general language of commercial correspondence. Most advertising is local; the chief media are newspapers, radio, television, posters, billboards, and sound trucks.

Shops are usually open from 10 am to 8 pm, Monday through Saturday, but these hours can vary. Most department stores and supermarkets are open on Sunday. Banking hours are weekdays from 9 am to 3 pm. Office hours, and hours for the Philippine government are generally from 8 am to 5 pm Monday through Friday, with a one-hour lunch break from 12 to 1 pm. Some offices are open from 8 am to 12 pm on Saturday. Staggered hours, with up to three shifts, are common in the metropolitan Manila area.

FOREIGN TRADE

The Philippines' traditional exports were primary commodities and raw materials. However, by 2000, machinery and transport equipment made up the majority of exports. In 2000, exports of electric machinery (mostly microcircuits, diodes, and transistors) accounted for 51% of total exports, and garments contributed 6.8% to the total value of exports. In 2000, the Philippines exported a majority of electronics, including microcircuits, transistors and valves (44%); automatic data processing equipment (12.2%); and telecommunications equipment (2.7%). Other exports included garments (6.8%), vegetable oil (1.2%), and fruits and nuts (1.1%). In 2000, machinery and electronics accounted for over three-fourths of all exports.

In 2004, the major exports were: electronic products (67.3% of all exports); semiconductors (47.1%); garments (5.5%); coconut oil (1.5%); and petroleum products (1%). Primary imports were: capital goods (38.1% of all imports); semi-processed raw materials (34%); parts for the manufacture of electronic equipment (15.4%); mineral fuels (11.7%); and chemicals (7.9%).

Japan and the United States continue to be the Philippines' primary trading partners. In percentage terms, for 2004, the Philippines' leading markets were: Japan (20.1% of all exports); the United States (17.9%); the Netherlands (9.1%); Hong Kong (7.9%); and China (6.7%). Leading suppliers included: Japan (19.8% of all imports); the United States (13.7%); China (7.7%); Singapore (7.4%); and Taiwan (7%).

BALANCE OF PAYMENTS

Since World War II, the Philippines experienced frequent trade deficits, aggravated by inflationary pressures. Deficits were counterbalanced by US government expenditures, transfer of payments from abroad, official loans (US Export-Import Bank, IBRD, and private US banks), net inflow of private investment, tourist receipts, remittances from Filipino workers overseas, and contributions from the IMF.

In 1996, trade liberalization policies helped to push imports up by 22% while exports rose by only 18%. The result was a widening trade deficit that amounted to 13% of GDP. Foreign investment in the stock market and remittances from overseas workers helped to offset the deficit and avert a balance-of-payments crisis. In 1998, the Philippines recorded a trade surplus at about 2% of GNP in the current account due to high electronics exports and low imports due to the devaluation of the peso. This was the first surplus in 12 years.

Merchandise exports, in double digits through most of the 1990s, slowed to a single-digit growth pace in 2000, reflecting fewer export receipts from electronics and telecommunications parts and equipment. This decline was attributed by the electronics industry to weaker prices for maturing products and technologies, and to the decline in electronic industry investments from the 199497 boom years (when investment averaged $1.5 billion a year).

Country Exports Imports Balance
World 36,231.2 39,543.5 -3,312.3
United States 7,273.4 7,674.5 -401.1
Japan 5,768.9 8,070.6 -2,301.7
China, Hong Kong SAR 3,093.9 1,690.9 1,403.0
Netherlands 2,921.7 323.8 2,597.9
Other Asia nes 2,492.2 1,966.8 525.4
Malaysia 2,462.6 1,434.6 1,028.0
Singapore 2,431.1 2,694.7 -263.6
China 2,144.6 1,932.6 212.0
Korea, Republic of 1,313.5 2,516.4 -1,202.9
Thailand 1,234.0 1,453.4 -219.4
() data not available or not significant.
Current Account 3,347.0
     Balance on goods -1,253.0
         Imports -36,095.0
         Exports 34,842.0
     Balance on services -1,227.0
     Balance on income 5,215.0
     Current transfers 612.0
Capital Account 21.0
Financial Account -5,533.0
     Direct investment abroad -158.0
     Direct investment in Philippines 319.0
     Portfolio investment assets -1,586.0
     Portfolio investment liabilities 880.0
     Financial derivatives
     Other investment assets -13,307.0
     Other investment liabilities 8,319.0
Net Errors and Omissions 2,081.0
Reserves and Related Items 84.0
() data not available or not significant.

Between 1996, exports surged from $20.5 billion to $38.1 billion. Imports reached $38.6 billion in 1997, but by 2000 had dropped to $33.8 billion. The 1999 and 2000 trade surpluses were the first since 1973; during the intervening period, expensive mineral fuel imports had thrown the balance into a deficit. In 2004, exports totaled $38.8 billion and imports totaled $44.7 billion, resulting in a trade deficit of $5.9 billion. The current account recorded a surplus of $2.2 billion in 2004, or 2.6% of GDP.

Traditionally, exports of primary products failed to balance imports, leading the government to restrict imports. Structural change accelerated in the 1970s, as the contribution of industry (including construction) to GDP rose from 29.5% in 1970 to 36.5% by 1980, primarily as a result of export-oriented industrialization promoted by the Marcos government. The Aquino assassination in August 1983 had immediate economic consequences for the Marcos government, as did the broader Third World Debt Crisis. Hundreds of millions of dollars in private capital fled the Philippines, leaving the country with insufficient foreign exchange reserves to meet its payments obligations. The government turned to the IMF and its creditor banks for assistance in rescheduling the nation's foreign debt, and an austerity program was set up during 198485. In December 1986, under IMF guidance, the Aquino government launched a privatization program with the establishment of the Assets Privatization Trust (APT). Monopolies established under the Marcos administration in coconuts, sugar, meat, grains, and fertilizer were dismantled and a ban on copra exports was lifted. All export taxes were abolished; and the government allowed free access to lower-cost or higher-quality imports as a means of improving the cost-competitiveness of domestic producers.

Many difficulties remained, however. The prices of commodity exports, such as sugar, copper, and coconut products, were still weak, while demand for nontraditional manufactured products, such as clothing and electronic components, failed to rise. The structural reforms produced an initial recovery between 1986 and 1989, but this was arrested by the series of natural disasters in 199091. In 1986, Aquino had also embarked on a Comprehensive Agrarian Reform Programme, but its goals remain unfulfilled.

In the 1990s, the government concluded three additional financial arrangements with the IMFa stand-by agreement signed 20 February 1991 for about $240 million; an arrangement under the Extended Fund Facility (EFF) signed 24 June 1994 for about $554 million, and a stand-by agreement signed 1 April 1998 for about $715 million. At the end of 2002, the Philippines owed over 140% of its quota to the Fund. Scheduled debt repayments to the IMF for 2003 were about $330 million, and outstanding loans and purchases are not due to be retired until at least 2007. The country also had five debt reschedulings in the period 1984 to 1991 with the Paris Clubfor official debt owed to aid donor countrieson which some payments are still owing.

BANKING AND SECURITIES

The Philippine banking structure consists of the government-owned Central Bank of the Philippines (created in 1949), which acts as the government's fiscal agent and administers the monetary and banking system; and some 45 commercial banks, of which 17 are foreign-majority-owned. Other institutions include more than 111 thrift banks, 787 rural banks, 38 private development banks, 7 savings banks, and 10 investment houses, and two specialized government banks. The largest commercial bank, the Philippine National Bank (PNB), is a government institution with over 194 local offices and 12 overseas branches. It supplies about half the commercial credit, basically as agricultural loans. The government operates about 1,145 postal savings banks and the Development Bank of the Philippines, the Land Bank of the Philippines, and the Philippine Amanah Bank (for Mindanao). There are also 13 offshore banking units in the country, and 26 foreign bank representative offices. Total assets reached approximately $65 billion in March 2001, 39% of which belonged to the five largest banks. The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $7.7 billion. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $41.9 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 8.298%.

Philippine stock exchanges are self-governing, although the Philippine Securities and Exchange Commission (SEC), established in 1936, has supervisory power over registrants. The country's two stock exchanges, Manila and Makati (both in the capital), were formally merged into the Philippines Stock Exchange (PSE) in March 1993. A computer link-up was effected a year later, although the two retained separate trading floors until November 1995. Only 220 companies were listed as of 1998. But the process of privatization is expected to push up listings, while domestic participation in the equity market is being specifically promoted by new regulations requiring that all initial public offerings reserve a 10% tranche for small investors. Before the Asian crisis, market capitalization of publicly listed companies had grown to $89 billion, or six times the amount of 1992. But in 1998, only 10 of the largest companies accounted for more than half of trading volume. In 2000, a financial scandal in which the SEC failed to regulate the market properly drove the stock market down by a quarter and destroyed investor confidence. In 2000, market capitalization was a mere 38% of the previous year, and only 12% of the peak level in 1996. As of 2004, a total of 233 companies were listed on the PSE, which had a market capitalization of $28.948 billion. In 2004, the PSE Composite Index rose 26.4% from the previous year to 1,822.8.

INSURANCE

The Government Service Insurance System (GIS), a government organization set up in 1936, provides life, permanent disability, accident, old age pension, burial insurance and salary and real estate loan benefits. Compulsory third-party motor liability insurance went into effect on 1 January 1976. In addition, workers' compensation and personal accident insurance for workers abroad are compulsory. The Insurance Commission of the Department of Finance oversees the insurance industry.

Life and nonlife insurance companies provide coverage against theft, fire, marine loss, accident, embezzlement, third-party liability, and other risks. In 2003, a total of $1.192 billion in direct insurance premiums were written, of which life insurance premiums accounted for $702 million. In 2003, Malayan Insurance was the Philippines' top nonlife insurer, with gross written nonlife premiums of $60.5 million. In 2000 (the latest year for which data was available), the leading life insurer was Philam Life and General, with gross written life insurance premiums of $161.3 million.

PUBLIC FINANCE

The principal sources of revenue are income taxes, taxes on sales and business operations, and excise duties. Infrastructural improvements, defense expenditures, and debt service continue to lead among the categories of outlays. The government's commitment to fiscal balance resulted in a budget surplus for the first time in two decades in 1994. The surplus was achieved by higher taxes, privatization receipts, and expenditure cuts. The Philippines was not affected as severely by the Asian financial crisis of 1998 as many of its overseas neighbors, as a result of over $7 billion in remittances annually by workers overseas.

The US Central Intelligence Agency (CIA) estimated that in 2005 the Philippines' central government took in revenues of approximately $12.3 billion and had expenditures of $15.7 billion. Revenues minus expenditures totaled approximately -$3.3 billion. Public debt in 2005 amounted to 77.4% of GDP. Total external debt was $67.62 billion.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, budgetary central government revenues were p628.71 billion and expenditures were p833.68 billion. The value of revenues was us$12 million and expenditures us$15 million, based on a market exchange rate for 2003 of us$1 = p54.203 as reported by the IMF. Government outlays by function were as follows: general public services, 54.2%; defense, 4.9%; public order and safety, 6.4%; economic affairs, 12.4%; housing and community amenities, 0.2%; health, 1.6%; recreation, culture, and religion, 0.7%; education, 15.5%; and social protection, 4.1%.

TAXATION

The individual income tax consists of taxes on compensation income (from employment), business income, and passive income (interests, dividends, royalties, and prizes). As of 2005, personal income was taxed on a progressive scale with a top rate of 32%.

In 2000, the business income tax rate was lowered from 33% to 32%, where it stood as of 2005. For resident foreign corporations, after-tax profits remitted abroad to the head office are subject to a 15% tax. Corporations registered with the Philippine Economic Zone Authority (PEZA), the Board of Investment (BOI), the Bases Conversion Development Authority, or operating in independent special economic zones (ecozones), are eligible for special tax and customs incentives, exemptions and reductions designed to attract foreign, new, necessary and/or export-oriented foreign investment. The capital gains tax is 6% on real property; 5% on gains of p100,000 or less from the sale of stock not listed on the stock exchange, and 10% on gains over p100,000. Dividends are not subject to taxation if paid from one domestic corporation to another domestic corporation, or to resident foreign corporations. However, dividends paid to nonresident companies are generally subject to a 32% withholding tax, which can be reduced to 15%, under certain circumstances. Some cities, such as Manila, levy their own wholesale and retail sales taxes.

Taxes on transactions include a value-added tax (VAT) of 10%. For smaller businesses not registered with the VAT a percentage sales tax of 3% on quarterly sales is applied. Higher rates for activities

Revenue and Grants 628.71 100.0%
     Tax revenue 537.36 85.5%
     Social contributions
     Grants 1.2 0.2%
     Other revenue 90.15 14.3%
Expenditures 833.68 100.0%
     General public services 451.76 54.2%
     Defense 40.65 4.9%
     Public order and safety 53.5 6.4%
     Economic affairs 103.4 12.4%
     Environmental protection
     Housing and community amenities 1.75 0.2%
     Health 12.98 1.6%
     Recreational, culture, and religion 6.14 0.7%
     Education 129.6 15.5%
     Social protection 33.93 4.1%
() data not available or not significant.

involving issues of public morality: cockpits are taxed 18%, cabarets, 18% and jai-alai and racetracks, 30%.

Excise taxes are imposed on selected commodities such as alcoholic beverages, tobacco products, jewelry and petroleum products. In addition, the government levies a variety of other taxes, including mining and petroleum taxes, residence taxes, a head tax on immigrants above a certain age and staying beyond a certain period, document stamp taxes, donor (gift) taxes, estate taxes, and capital gains taxes. A document stamp tax is charged on stock certificates, proofs of indebtedness, proofs of ownership, etc.

CUSTOMS AND DUTIES

The Philippines, under its commitments to ASEAN, must accelerate its tariff reductions as part of in its AFTA Common Preferential Tariff (CEPT) Inclusion List. The Philippines, as a member of the Asia Pacific Economic Cooperation (APEC) forum, is also committed to the establishment of free trade in the region and is expected to eliminate intra-regional barriers by 2020. The government developed a separate plan in 1996 to lower tariffs to no more than 3% on raw materials and 10% on finished products by January 2003, and a uniform 5% tariff rate by January 2004. There is also a value-added tax (VAT) of 10% on almost all imports and excise taxes are levied on alcohol and tobacco products, automobiles, and other luxury items.

FOREIGN INVESTMENT

Investments have been concentrated in manufactures for exports, utilities, mining, petroleum refining, and export-oriented agriculture, with accelerating interest in labor-intensive textiles, footwear, electronics, and other nontraditional export industries. Investment is affected by import controls, exchange controls, and equity controls that favor Filipino participation in foreign ventures. Attempts to liberalize the economy of the Philippines are fighting three centuries of entrenched interests. Filipino political science research points out the influence and effects of Spanish colonialism that delivered the control of politics and economics into the hands of a small number of families. In the name of nationalism these families legislated against foreign competition in the 1950s. Serious restructuring began in the wake of the Third World debt crisis and the turn to the IMF for assistance. The Omnibus Investments Code of 1987 generally limited foreign equity ownership to 40%, but allowed 100% foreign ownership in a "pioneer" priority industry identified in the annual Investment Priorities Plan (IPP). Special encouragement was given to pioneer manufacturing endeavors, export-oriented and labor-intensive industries, projects outside metropolitan Manila, and to joint ventures with a minimum of 60% Filipino capitalization. The structural reforms produced an initial recovery between 1986 and 1989, but this was arrested by the series of natural disasters in 199091.

The Foreign Investment Act of 1991 (FIA) further liberalized the investment climate of the Philippines. The FIA permits 100% foreign ownership, without prior BOI approval, of companies engaged in any activity not included in the foreign investment negative list. The foreign investment negative list is comprised of three categories where foreign investment is fully or partially restricted by the constitution or by specific laws. In all three categories foreign ownership is restricted to between zero and 40%. Restriction on setting up export processing zones has also been considerably relaxed. The development of special economic zones began with the transformation of the former US military bases into enterprise zones, the Subic Bay Freeport Zone (SBFZ) and the Clark Special Economic Zone (CSEZ) according to the Bases Conversion Act of 1992.

The Export Development Act of 1994 signaled the government's conversion from an import substitution model of industrial development to an export-led growth model, more in line with its Asian tiger neighbors. The banking and insurance sectors were also significantly liberalized by legislation in 1994. Since 1948 the four existing foreign banks had not been allowed to open branches. Under a 1994 law, each was allowed to open up to six new branches, plus up to 10 new foreign full-service banks could be licensed with up to six branches each. Insurance was opened to 100% foreign ownership but such that the higher the percent foreign ownership, the higher minimum capital requirements. Rural banking, however, continues to remain closed to foreign investment. The next year, in 1995, the Special Economic Zone Act, and separate laws for independent ecozones in Zoambanga and Cayagyu, established the framework for the collection of four government-managed ecozones and over 40 private ecozones, all with liberalized incentives to attract foreign investment. Amendments to the FIA in 1996 enhanced the investor-friendly framework, albeit leaving the country vulnerable to the rapid divestments of the Asian financial crisis the next year. With recovery, the government embarked on further reforms aimed at attracting foreign investors.

In May 2000, the General Banking Law (GBL), in addition to strengthening the supervisory role of the Bangko Sentral ng Philippines (BSP), allowed 100% ownership of distressed banks. Also in 2000, the Estrada administration opened the retail trade and grain milling businesses to foreign investment.

There remain, however, major restrictions on foreign investments in the Philippines besides the natural hindrances that this most disaster-prone of countries is liable to, not the least of which is the complexity and detail of the investment regime. Under the FIA, the government is obliged to promulgate a Foreign Investment Negative List (FINL) consisting of a List A of foreign ownership limited by the constitution and specific laws, and a List B of foreign ownership limited for reasons of security, defense, risk to health and morals and protection of small and medium-scale enterprises.

In 2002 President Arroyo issued the Fifth FINL. On List A, by its terms, no foreign equity was to be allowed in the mass media except recording, nor in any of the licensed professions including law, medicine, accounting, engineering, environmental planning, interior design, teaching, and architecture. Small scale retail and mining, private security, utilization of marine resources, the operation of cockpits, and the manufacture of fireworks, are off-limits to foreigners, as are, on another level, the manufacture and stockpiling of nuclear, biological, chemical and radiological weapons. Only a maximum of 20% ownership is allowed a private radio communications network; only up to 25% in employee recruitment industries, public works construction projects (though with important exceptions for infrastructure/development projects, and those built with foreign aid); only up to 30% in ad agencies; only up to 40% in natural resource extraction projects (though the president can authorize up to 100%), ownership of private lands, ownership of condominiums, educational institutions, public utilities, commercial deep sea fishing, government procurement contracts, adjustment companies, and rice and corn processing (with at least 60% divestment to Filipino citizens required after 30 years of operation); and only up to 60% in financial and investment houses. On the B list for 2002, foreign ownership was restricted to 40% in manufacture of firearms, ammunition, explosives, military ordnance, dangerous drugs, saunas, steambaths, massage parlors, all forms of gambling, local businesses not engaged in exporting with paid-in capital of less than $200,000 and local businesses that involved advanced technology or employed at least 50 persons with paid-in capital of less than $100,000.

In 2001, President Arroyo, a trained economist, launched a high profile campaign to attract foreign investment. Former president Fidel Ramos and four other senior government officials were appointed as envoys to promote trade and investment. Against strong nationalist opposition, her administration passed the Electric Power Industry Reform Act that required the National Power Corporation (NPC) to privatize at least 70% of its generating assets by 2004. NPCs transmission assets were fully privatized and opened up to the maximum 40% foreign ownership allowed for public utilities. 2001, in fact, turned out to be a banner year for foreign investment in the Philippines, which increased 171% to $3.4 billion (about $2 billion FDI and $1.4 billion portfolio investment), all the more remarkable because of the decline by 50% worldwide in foreign investments that year, and because of the Philippines' emergence as a front in the war on terrorism, thanks to the Abu Sayyaf organization and its close links to al-Qaeda. The Philippines' newly deregulated and privatized energy sector was the main draw, the center piece being the Malampaya natural gas project, which was officially inaugurated on 16 October 2001 following the completion of its 312-mile (504-km) undersea pipeline and the conversion of three power plants in Batangas to natural gas usage.

The Philippine government, despite its attempts to attract more foreign investment, has failed to invest in the infrastructure that is crucial to foreign and domestic investorsroads, communications, healthcare, and education. The government has been unable to address the issues of congestion and pollution in Manila. Nevertheless, in 2002 FDI increased to $1.7 billion, but dropped to $318 million in 2003. Nine-month FDI from January to September 2004 amounted to $330 million, which was an increase of 30.4% over the same period in 2003, but remained low when compared with previous years.

ECONOMIC DEVELOPMENT

Beginning in 1972, the main tenets of the Marcos government's economic policies, as articulated through the National Economic Development Authority, included substantial development of infrastructure, particularly through the use of labor-intensive rather than capital-intensive (i.e., mechanized) methods, and a shift in export emphasis from raw materials to finished and semifinished commodities. The policies of the Aquino administration have stressed labor-intensive, small and medium-scale agricultural projects and extensive land reform. In addition, wealth believed to have been amassed by President Marcos was actively being pursued all over the world. Long-range planning has followed a series of economic plans, most of them covering five-year periods. The development program for 196770 aimed to increase the growth rate of per capita income from the 0.9% level in 196165 to 2.4%; to increase national income by 5.7% per year during the plan period, and to reduce the unemployment rate from 13% (1965) to 7.2% (1970). The government invested $3.5 billion in integrating the traditional and modern sectors of the economy. Marcos's first long-range plan following the 1972 declaration of martial law was a four-year (197477) infrastructure development program calling for 35% to be expended on transportation, 33% on energy and power, 20% on water resources, 10% on education, health, and welfare, and 2% on telecommunications. A 197478 plan, announced in late 1975, envisioned energy as the major focus of the new plan, with 34% of expenditures, followed by transportation, 30%; water resources, 23%; social programs, 7%; and other sectors, 6%. The goals of the 197882 plan included an 8% annual growth in GNP, rural development, tax incentives for export-oriented industries, continued self-sufficiency in grain crops despite rapid population growth, and accelerated development of highways, irrigation, and other infrastructure. The 198387 plan called for an annual expansion of 6.2% in GNP, improvement of the rural economy and living standards, and amelioration of hunger.

Under the Aquino administration the goals of the 198792 plan were self-sufficiency in food production, decentralization of power and decision making, job creation, and rural development. Economic performance for real growth fell far short of plan targets by 25% or more. Structural changes to provide a better investment climate were carried out. The Foreign Investment Act of 1991 liberalized the environment for foreign investment. An executive order issued in July 1991 reduced the number of tariff levels over five years and reduced the maximum duty rate from 50% to 30%. Quantitative restrictions were removed from all but a few products. The foreign exchange market was fully deregulated in 1992.

A new six-year medium-term development plan for 199398 was presented by the government in May 1993. The plan stressed people empowerment and international competitiveness within the framework of sustainable development. To do this, the government planned to disperse industries to regions outside the metropolitan Manila area. The plan also called for technological upgrading of production sectors, poverty alleviation, and human/social development. Over the six year period, agriculture's share of GDP was expected to decline from 23% to 19% of GDP while industry's share was to increase from 34% to 39%. The Medium-Term Philippine Development Plan (MTPDP) for 1999 through 2004 focused on rural development, especially on the modernization of the agricultural sector. The MTPDP targeted agricultural growth from 2.6% to 3.4% during the plan's time-frame, as well as growth in the industrial and service sectors. The Philippines finished three years of IMF supervision in March 1998, only to be hit by the Asian financial crisis. Financial assistance continued in 1998 and 1999 through the Asian Development Bank, World Bank, and Japan's Overseas Economic Cooperation Development Fund.

By 2006, the primary economic policy challenge confronting the government was to bring the public finances back into balance, allowing increased expenditure on areas such as infrastructure, education, and healthcare. The fiscal deficit had been pushed up due to poor tax administration, which saw revenue fall relative to GDP. The ballooning public debt is a problem, at 77.4% of GDP in 2005. Interest payments account for a third of all public spending. Nevertheless, the stock market in mid-2005 was at a five-year peak, and the peso was at its highest against the dollar since mid-2003. Applications for investment incentives had more than doubled in 2004 and were also high in 2005.

In the mid-2000s, the economies of Southeast Asia revolved around trade. In 2004, the region experienced a 6.3% GDP growth rate, largely due to a double-digit increase in exports. But looking solely to exports as a means to promote growth is risky: what is needed is a revival of domestic consumption, which would help insulate the region from the vagaries of the world economy. The only country where exports did not make a significant contribution to growth by 2005 was the Philippines, where almost all growth was attributable to domestic demand. Instead of being a mark of strength, however, this was a mark of economic weakness. Due to the billions of dollars of remittances that Filipinos working overseas send to their families back home, consumer spending in the Philippines is robust. However, the economy does not grow fast enough to provide jobs for those Filipinos who must find work overseas.

SOCIAL DEVELOPMENT

The Social insurance system covers employees up to age 60, including domestic workers and the self-employed. Membership for employers is compulsory. Benefits include compensation for confinement due to injury or illness, pensions for temporary incapacity, indemnities to families in case of death, old age pensions, and benefits to widows and orphans. Charges to cover the system are paid jointly by employers and employees and according to 29 wage classes. The government funds any deficit. Retirement is at age 60 for most workers. A medical care plan for employees provides hospital, surgical, medicinal, and medical-expense benefits to members and their dependents, as well as paid maternity leave.

A handful of women enjoy high prestige and visibility, but most women occupy traditional social roles and occupations. Unemployment rates are higher for women, and women continue to earn less than men. Sexual harassment in the workplace is widespread, and goes largely unreported because women are afraid of losing their jobs. Spousal abuse and violence remain serious concerns. The absence of divorce laws and lack of economic opportunity keep women in destructive relationships. The government has enacted various measures to safeguard the rights of children. Child prostitution, while illegal, is widespread and has contributed to the growing sex-tourism industry. Some human rights violations remain, including arbitrary arrest and detention, torture, and disappearances.

HEALTH

In 2004, there were an estimated 116 physicians, 56 dentists, 442 nurses, and 179 midwives per 100,000 people. There were 1,663 hospitals, 562 of which were operated by the government and 1,101 in the private sector. Government-financed child health malnutrition and early education programs are already well established in the Philippines. These programs suffer from chronic underfunding in terms of inadequate equipment, numbers of field-level staff, and other operating expenses. Government hospitals had 46,388 beds and private hospitals had 35,309. In addition, there were 2,299 rural health units. Total health care expenditure was estimated at 3.6% of GDP.

Pulmonary infections (tuberculosis, pneumonia, bronchitis) are prevalent. Malnutrition remains a health problem despite government assistance in the form of Nutripaks (consisting of indigenous foods such as mung beans and powdered shrimp) that are made available for infants, children, and pregnant women. It was estimated that 32% of children under five years old were considered malnourished. Protein malnutrition, anemia, and vitamin A and iodine deficiencies are commonly found in children. The goiter rate was 6.9 per 100. Heart disease is the third most common cause of death in the Philippines.

During the 1980s, a nationwide primary health care program was implemented. As a result, community involvement in health services increased, the prevalence of communicable diseases decreased, and the nutritional state of the population improved. Obesity and hypertension are more common in the cities. Approximately 87% of the population had access to safe drinking water and 83% had adequate sanitation. Children up to one year of age were immunized against tuberculosis, 91%; diphtheria, pertussis, and tetanus, 85%; polio, 86%; and measles, 96%. The rate for both DPT and measles was 79%.

The infant mortality rate declined from 78.4 per 1,000 live births in 1972 to 23.51 in 2005. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 26.9 and 6 per 1,000 people. Maternal mortality was 170 per 100,000 live births. In 2000, 47% of married women (ages 15 to 49) were using contraception. Average life expectancy was 69.91 years in 2005.

The HIV/AIDS prevalence was 0.10 per 100 adults in 2003. As of 2004, there were approximately 9,000 people living with HIV/AIDS in the country. There were an estimated 500 deaths from AIDS in 2003.

HOUSING

Construction is largely undertaken by the private sector, with the support of government agencies. The Ministry of Human Settlements (MHS), created in 1978, sets housing programs in motion. Its first major program was the Bagong Lipunon Improvement of Sites and Services (BLISS), which undertook 445 projects involving 6,712 units housing 40,272 people. As with many programs begun during the Marcos administration, the projects became ridden with scandal.

More creditable was the Pag-IBIG fund, which was set up to promote savings for housing and provide easy-term housing loans, with contributions from individuals, banks, industries, and the government. By the end of 1985, p98 million in loans had been provided to 171,585 members. The Aquino administration offered tax exemptions to domestic corporations and partnerships with at least 300 employees that invest funds in housing. Over 5 million housing units were built in the period 198190.

At the 2000 census, there were 15,278,808 households in the Philippines with an average household size of 5 members. Most housing units are single-family detached homes. About 71% of all housing was owner occupied. Only about 27% of all households have their own community service-connected faucet for drinking water. A majority of households get their water from wells, river, lakes, and other bodies of water. Only 41% of all households had a privately used septic system.

Tens of thousands of barrios are scattered throughout the Philippines, each consisting of a double row of small cottages strung out along a single road. Each cottage is generally built on stilts and has a thatched roof, veranda, and small yard.

EDUCATION

Education is free for primary school and compulsory for six years and is coeducational. English is the main medium of instruction, although Pilipino or the local vernacular is used for instruction in the lower primary grades. Primary school lasts for four years, followed by two years of intermediate school. Students may then move on to four years of secondary school. The academic year runs from June to March.

In 2001, about 33% of all five-year-olds were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 94% of age-eligible students. The same year, secondary school enrollment was about 59% of age-eligible students; 54% for boys and 65% for girls. It is estimated that about 95.2% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 35:1 in 2003; the ratio for secondary school was about 37:1. In 2003, private schools accounted for about 7% of primary school enrollment and 20.5% of secondary enrollment.

The University of the Philippines, in Quezon City, with branches in major islands, is the leading institution of higher learning. In addition, there are some 50 other universities, including the University of Santo Tomás, founded in 1611 and run by the Dominican friars. In 2003, about 30% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 92.6%.

As of 2003, public expenditure on education was estimated at 3.1% of GDP, or 17.8% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library in Manila has an estimated 1.2 million volumes. The Filipiniana and Asia Division contains over 100,000 Filipiniana books. Large libraries are in the universities, notably the University of the Philippines (948,000 volumes), the University of Santo Tomás (822,000), the University of the East (177,900), and the University of San Carlos. The International Rice Research Institute in Manila holds 160,000 volumes. There are over 940 public libraries across the country, with about 580 as city or municipal libraries.

The National Museum in Manila collects and exhibits materials and conducts research in anthropology, ethnography, archaeology, botany, geology, history, and maps. The University of Santo Tomás Museum contains an art gallery and archaeology and anthropology collections. Three relatively new museums in Manila exhibit primarily art: Lopez Memorial Museum (1960) exhibits Filipino painters; Metropolitan Museum (1976) exhibits a variety of art forms; and the Philippines Presidential Museum (1986) exhibits fine and decorative arts. The Ateneo Art Museum in Quezon City features post-World War II Philippine paintings, and there is a Mabini Shrine in Tonauan, featuring relics of Apolinaria Mabina, a leader of Philippine independence.

MEDIA

There are four nationwide telephone networks, including the Philippine Long Distance Telephone Company, run mainly by the private sector, with services concentrated in urban areas. Overseas communications operate via satellites and undersea cables. In 2003, there were an estimated 41 mainline telephones for every 1,000 people. The same year, there were approximately 270 mobile phones in use for every 1,000 people.

Radio and television are operated by both government agencies and private concerns. Radio transmitting stations numbered over 700 in 2005, and there were 75 television stations in 2000. In 2003, there were an estimated 161 radios and 182 television sets for every 1,000 people. About 37 of every 1,000 people were cable subscribes. Also in 2003, there were 27.7 personal computers for every 1,000 people and 44 of every 1,000 people had access to the Internet. There were 161 secure Internet servers in the country in 2004.

In 2002 there were about 50 major daily newspapers, as compared with six during the Marcos era. The leading dailies published in metropolitan Manila (with language of publication and estimated 2002 circulation) are: People Tonight (English/Filipino, 500,000), Abante (English/Filipino, 350,000), Ang Filipino Ngayon (Filipino, 286,450), Philippine Star (English, 275,000), Manila Bulletin (English, 265,000), Philippine Daily Inquirer (English, 250,000), Tempo (English/Filipino, 230,000), People's Journal (English/Filipino, 219,000), Manila Times (English, 194,000), Malaya (English, 175,000), and Balita (Filipino, 151,000).

Under martial law, censorship of the press, radio, and television was imposed by the Marcos government. Many reporters, editors, and publishers were arrested during this period. Censorship was revoked under the Aquino administration. However, there are reports of threats, assaults, and killings of journalists who report on illegal activities such as gambling, logging, prostitution, and the drug trade among powerful individuals or groups, especially outside Manila.

ORGANIZATIONS

The Philippine Chamber of Commerce and Industry has branches in metropolitan Manila and other important cities, and there are associations of producers and industrial firms in many areas. The Trade Union Congress of the Philippines based in Quezon City represents over 1.4 million people. There are many associations of persons active in such fields as agriculture, architecture, art, biology, chemistry, economics, library service, literature, engineering, medicine, nutrition, veterinary service, and the press. The multinational ASEAN Confederation of Employers is located in Makati City, with that office coordinated in part by the Employers' Confederation of the Philippines.

The Philippine Academy is the oldest and best-known scholarly organization. The National Research Council of the Philippines promotes research and education in physical and social sciences and the humanities. A number of professional associations also promote public research and education in specific fields, particularly those involved in medical research and healthcare, such as the Philippine Medical Association, the Philippine National AIDS Council, and the Philippine Diabetes Association.

National youth organizations include the National Youth Parliament, League of Filipino Students, National Indigenous Youth, Junior Chamber, National Union of Students of the Philippines, Student Christian Federation of the Philippines, Young Christian Workers of The Philippines, Boy Scouts of the Philippines, and YMCA/YWCA. Sports associations are popular throughout the country. The International Bowling Federation is based in Pasig City.

There are several national organizations focusing on women's rights, including the Philippine Association of University Women and the National Commission on the Role of Filipino Women. Kiwanis and Lion's Clubs have programs in the country. The Asian Volunteers' Network for Human Rights in the Philippines is based in Quezon City. International organizations with national chapters include CARE Philippines, Defence for Children International, UNICEF, Habitat for Humanity, Amnesty International, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

The increase in tourism that followed the ouster of Ferdinand Marcos was dampened by the national disasters of the early 1990s. The tourism industry has since rebounded. Manila remains the chief tourist attraction. Other points of interest are the 2,000-year-old rice terraces north of Baguio; Vigan, the old Spanish capital; Cebu, the oldest city; numerous beaches and mountain wilderness areas; and homes formerly owned by the Marcoses. Basketball is the national sport, followed in popularity by baseball and football (soccer). Jai-alai is popular in Manila and Cebu. Cockfighting is legal and often televised. Each tourist must have a valid passport and an onward/return ticket; no visa is required for stays of up to 21 days.

In 2003, about 1.9 million tourists arrived in the Philippines. Over 58% of the tourists arrived from East Asia and the Pacific; North Americans accounted for close to 25%. There were 21,409 hotel rooms with 42,818 beds and a 60% occupancy rate that year. Tourism expenditure receipts totaled $1.5 billion.

According to 2005 US Department of State estimates, the cost of staying in Manila was $199 per day.

FAMOUS FILIPINOS

Filipinos have made their most important marks in the political arena. Foremost are José Rizal (186196), a distinguished novelist, poet, physician, linguist, statesman, and national hero; Andrés Bonifacio (186397), the leader of the secret Katipunan movement against Spain; and Emilio Aguinaldo y Famy (18691964), the commander of the revolutionary forces and president of the revolutionary First Philippine Republic (1899). Notable Filipinos of the 20th century include Manuel Luis Quezon y Molina (18781944), the first Commonwealth president; Ramón Magsaysay (190757), a distinguished leader in the struggle with the Hukbalahaps; and Carlos Peña Rómulo (18991985), a Pulitzer Prizewinning author and diplomat and the president of the fourth UN General Assembly. Ferdinand Edralin Marcos (191789), who won distinction as a guerrilla fighter during the Japanese occupation, was the dominant political figure in the Philippines from his first election to the presidency in November 1965 to his ouster in February 1986. His wife, Imelda Romualdez Marcos (b.1929), emerged as a powerful force within her husband's government during the 1970s. Leading critics of the Marcos government during the late 1970s and early 1980s were Benigno S. Aquino, Jr. (193383) and Jaime Sin (19282005), who became the archbishop of Manila in 1974 and a cardinal in 1976. Maria Corazon Cojuangco Aquino (b.1933), the widow of Benigno, opposed Marcos for the presidency in February 1986 and took office when he went into exile in the same month. Fidel Valdez Ramos (b.1928) succeeded Corazon Aquino and governed from 1992 until 1998, when he was succeeded by Joseph Estrada (b.1937). Estrada led the country from 19982001; Gloria Macapagal-Arroyo (b.1947) succeeded him in 2001.

Lorenzo Ruiz (fl.17th cent.) was canonized, along with 15 companion martyrs, as the first Filipino saint. Fernando M. Guerrero (18731929) was the greatest Philippine poet in Spanish. Two painters of note were Juan Luna y Novicio (185799) and Félix Resurrección Hidalgo y Padilla (18531913). Contemporary writers who have won recognition include Claro M. Recto (18901960), José García Villa (191497), and Carlos Bulosan (191456). José A. Estella (18701945) is the best-known Filipino composer. Filipino prizefighters have included two world champions, Pancho Villa (Francisco Guilledo, 190125) and Ceferino García (191081).

DEPENDENCIES

The Philippines has no territories or colonies.

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