Flag of the Philippines

Republic of the Philippines country brief

Overview

The Philippines is situated between the South China Sea and the Pacific Ocean and lies entirely within the tropics. Forming part of the Malay Archipelago, with a total land area of 299,303 sq km (slightly larger than the State of Victoria), the Philippines extends 1,770 km from north to south and 1,100 km from east to west.

It consists of 7,107 islands and islets of which only 2,773 have names and about 500 are larger than a square kilometre. In order of size, the largest islands are Luzon, Mindanao, Palawan, Panay, Mindoro, Samar, Negros, Leyte, Cebu, Bohol, and Masbate. Together they make up 95 per cent of the total land area. The three major island groups are Luzon, Visayas and Mindanao.

The Philippines’ population is approximately 100 million (July 2014 est.). An additional 12 million Filipinos live overseas, comprising one of the world's largest diasporas. In pre-Spanish times, the Philippines were populated by people related racially, linguistically and culturally to the people of Indonesia and Malaya. The Philippines remained generally outside the mainstream of Indian cultural influence, although this did filter into the country. Chinese influence has been progressive and considerable and has been exercised largely through commercial and trading relations dating from pre-Spanish times.

Islamic contact began in the fourteenth century and made its presence felt during the fifteenth century. When the Spaniards arrived, the Islamic influence was already established in much of the Philippines as it was in the rest of the Malay world. With the arrival of Miguel López de Legazpi from Mexico City, in 1565, the first Spanish settlement in the archipelago was established. The Philippines became part of the Spanish Empire for more than 300 years. This resulted in the predominant religion in the country being Roman Catholicism. The Spaniards were eventually able to dislodge Islam from the areas where it had not been long established (e.g. Manila), confining it principally to the southern parts of the country.

Political overview

System of government

The Philippines is a constitutional republic with a democratically elected presidential system and a bicameral Congress. It is governed as a centralised state with the exception of the Autonomous Region in Muslim Mindanao (ARMM) which has its own regional Government. The ARMM has the power to create its own sources of revenues and to levy taxes, fees, and charges, subject to Constitutional provisions. There have been attempts to change the government to a federal, unicameral, or parliamentary government since the Ramos administration (1992-98).

The President functions as both the head of state and the head of government, and is the commander-in-chief of the armed forces. The president is elected by popular vote for a single six-year term, during which he or she appoints and presides over the cabinet.

The bicameral Congress is composed of the Senate, serving as the upper house, with members elected to a six-year term, and the House of Representatives, serving as the lower house, with members elected to a three-year term. The senators are elected at large while the representatives are elected from both legislative districts and through sectoral representation.

Judicial power is vested in the Supreme Court, composed of a Chief Justice as its presiding officer and fourteen associate justices, all of whom are appointed by the President from nominations submitted by the Judicial and Bar Council.

Recent political developments in the Philippines

Elections were held in the Philippines on 10 May 2010 to elect the President; Vice-President; 12 senators; all 287 members of the House of Representatives; and provincial, city and municipal elected officials. Benigno Simeon C. Aquino III and Jejomar C. Binay were sworn into office on 30 June 2010 as President and Vice President respectively. President Aquino is constitutionally limited to a single six-year term as President.

Mid-term elections held in May 2013 for a range of elected offices, including half of the 24 Senate seats, delivered favourable outcomes for candidates aligned with the Aquino Administration. The results strengthened the Administration’s mandate to continue with its major reform agenda which, amongst other priorities, focuses on eliminating corruption and alleviating poverty.

Conflict in the Southern Philippines

On 27 March 2014, the Government of the Philippines and the Moro Islamic Liberation Front (MILF) signed a historic comprehensive peace agreement, bringing years of negotiation to a conclusion. Comprising a framework peace agreement signed in October 2012 and four subsequently-negotiated annexes, the Comprehensive Agreement on the Bangsamoro provides for a transitional process from the current Autonomous Region in Muslim Mindanao (ARMM) to a new autonomous entity, to be called the Bangsamoro (‘the Moro homeland’ in Filipino). A 15-member Transition Commission, comprised of Government and MILF representatives appointed by President Aquino, will draft a basic law for the new entity, which is to be submitted to Congress later this year. Pending congressional support, a plebiscite will be held throughout the ARMM and adjacent areas.

Australia has been a longstanding supporter of the peace process, including through the aid program. An additional AUD6 million committed over the next three years will help boost institutional capacity to implement the agreement and strengthen the foundations for long-term peace and stability in the southern Philippines.

The Australian Government continues to advise Australians not to travel to central and western Mindanao, including the Zamboanga Peninsula and Sulu Archipelago, due to the very high threat of terrorist attack, kidnapping, violent crime and violent clashes between armed groups. Detailed travel advice for the Philippines, including the southern Philippines, is available on DFAT’s Smartraveller website.

Foreign policy

The Philippines is a founding member of ASEAN and has a history of close relations with the United States, despite its 1992 decision to close US bases at Subic Bay and at Clark. Under the Ramos Administration, the Philippines began to play a more prominent role in ASEAN and other regional bodies such as APEC.

The Aquino Administration has maintained the traditional three pillars of Philippine foreign policy: national security, economic diplomacy and the protection and promotion of the welfare of Filipinos abroad. Engagement with ASEAN remains a ‘cornerstone’ of foreign policy. Over the past two years, the Philippines has been particularly concerned about overlapping territorial claims in the South China Sea (SCS) involving China, Vietnam, Malaysia and Brunei. Following an incident in the SCS in March 2011 involving a Philippine survey ship and a Chinese naval vessel, relations between the Philippines and China suffered. Recently, both countries have sought to quarantine SCS issues from the broader bilateral relationship. Against this background, the Philippines has been seeking to refresh and reconfirm its traditional security ties with the US and other key regional countries such Japan and South Korea.

Aquino has also continued to accord a high priority to the protection and promotion of the welfare and safety of Filipino overseas workers who play a critical role in the country's economic and social stability. Encouraging foreign direct investment to the Philippines has also been another important focus.

Bilateral relations

Australia and the Philippines have a long history of bilateral cooperation. Diplomatic relations were established when Australia opened a Consulate-General in Manila on 22 May 1946. An Australian Ambassador to the Philippines was appointed in 1957. The Philippines opened an Embassy in Canberra in 1962.

Australia and the Philippines cooperate closely in a broad range of areas, including defence, counter-terrorism, law enforcement and development. Regular bilateral meetings include the Foreign and Trade Ministers’ meeting (the Philippines-Australia Ministerial Meeting, or ‘PAMM’) and associated PAMM business dialogue and senior officials’ meeting; counter-terrorism consultations; annual joint defence cooperation consultations; a joint working group on mining; an agriculture forum; a strategic dialogue; and High Level Consultations on Development Cooperation.

Australia and the Philippines share common perspectives on many regional, economic and security issues. The two countries share a common interest in cooperating in regional affairs through fora such as the East Asia Summit (EAS), Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN) Regional Forum. Both Australia and the Philippines are active members of the Cairns Group, a coalition of 19 agricultural exporting countries.

People-to-people links

Australia and the Philippines have growing people-to-people links through trade, investment, cultural exchange, education, tourism and migration. Significant numbers of Filipinos have immigrated to Australia since the 1960s and Filipinos remain one of the fastest growing immigrant communities in Australia. At the 2011 Census, 225,000 Australians identified as having Filipino ancestry, up from 129,000 in 2001. Education ties between our countries are growing. In 2013, over 8,400 Filipino students enrolled in Australian education institutions, an increase of 26.3 per cent from 2012. The Australian Parliament has an Australia-Philippines Parliamentary Group, whose members have participated in exchange visits to study the history, culture and politics of the Philippines.

Australia Awards

Australia Awards delivered under the Australian aid program continue a long tradition of development scholarships that have been an important component of the Australian government's overseas aid program since the 1950s. More information, including applicant eligibility criteria can be found at:

Volunteers

The Australian Volunteers for International Development (AVID) program promotes economic growth and poverty reduction in the Indo-Pacific region by assisting host organisations to deliver effective and sustainable development outcomes.

Australia’s overseas volunteer program, Australian Volunteers for International Development, has a one-stop entry point to Australian volunteering.

Development assistance

While the Philippines has experienced strong economic growth, almost 25 per cent of Filipinos live on less than USD1.25 per day. Helping the Philippines to tackle poverty and enhance prosperity will build greater stability and security for one of Australia’s close neighbours and the region.

Australia is the largest grant aid donor to the Philippines, with over AUD170 million committed in the 2013-14 aid budget. The Australian aid program is focussed on the agreed priorities of the Australian and Philippine Governments as they seek to promote prosperity, reduce poverty and enhance stability through partnering for education reforms, enhancing the foundations for sustained economic growth, promoting better disaster preparedness, improving conditions for peace and security and building stronger institutions for accountable and inclusive development.

During her visit to the Philippines for the Philippines-Australia Ministerial Meeting (PAMM), Foreign Minister Julie Bishop announced the Basic Education Sector Transformation (BEST) initiative. A six-year, AUD150 million program, BEST is designed to benefit more than eight million Philippine students across 19,000 schools.

In support of sustainable economic growth, Foreign Minister Bishop also announced a further USD2.5 million for the Public Private Partnership (PPP) Program during the PAMM visit. The PPP Program aims to mobilise private sector investment to meet critical infrastructure needs.

Decades of conflict have hindered the development of Mindanao, in the southern Philippines. Poverty, a lack of basic education and weak governance are ongoing problems in conflict-affected areas.Australia’s aid programs are introducing education in remote communities, providing new opportunities for youth involved with armed groups and helping local governments to be more accountable to citizens.

The Philippines is the third most vulnerable country to natural disasters and the sixth most vulnerable to climate change. When earthquakes, volcanoes and severe typhoons occur, the poor are worst affected. Australia is one of the first countries to respond when typhoons affect millions of Filipino people. Most recently, Australia’s humanitarian response following Typhoon Haiyan involved AUD41 million in assistance, including the provision of medical teams, as well as the deployment of significant military assets and personnel to those areas most affected. Australia is also partnering with the Philippine Government in long term programs to ensure communities are better prepared for natural disasters.

ACIAR

ACIAR’s program in the East Asia region is the largest of all four regions where we operate but the percentage of projects that are regional is relatively small (12 per cent of budget), reflecting the strong bilateral relationships that ACIAR has with countries in East Asia.

Direct Aid Program (DAP)

The Direct Aid Program is a small grant scheme that partners with various organisations to support projects which directly contribute to the welfare and the income-generating capacity of poor or disadvantaged groups, or enhance the long-term productivity and sustainability of the physical environment.

Philippines Australia Community Assistance Program (PACAP)

The Philippines Australia Community Assistance Program is a small grants program that supports community projects implemented by civil society organisations in partnership with local communities and local governments. It promotes sustainable and gender-responsive development projects.

Defence and security cooperation

Australia's annual bilateral defence cooperation program includes high-level policy talks, training of Philippine defence personnel in Australia, and visits by senior officials. The defence relationship is focused on counter terrorism, maritime security and assistance to the Philippines Defence Reform Program.

Australia and the Philippines signed a Status of Visiting Forces Agreement (SOVFA) in 2007, which entered into force in September 2012. Australia and the Philippines signed a bilateral MOU on Cooperation to Combat International Terrorism and an MOU on Combating Transnational Crime in 2003. Australia's counter-terrorism cooperation with the Philippines includes practical assistance in policing, immigration, and port and airport security.

Economic overview

The Aquino Administration has publicly committed to a program of economic reform which, if implemented, has the potential to open up areas for further economic cooperation in both trade and investment.

The Philippine economy grew by 7.2 per cent in 2013. Philippine GDP has grown on the back of robust domestic consumption, an improvement in exports, acceleration in private investment, and government spending. The Philippine economy rebounded from the global financial crisis in 2010 and grew by 7.6 per cent, however growth slowed significantly to 3.9 per cent in 2011, then rebounded to 6.6 per cent in 2012.

The macro-economic fundamentals of the Philippine economy remain sound. Inflation and interest rates are low and the currency is stable. Overseas Filipinos' remittance income, which accounts for approximately 10 per cent of the Philippine economy, continues to support domestic consumption. Business Process Outsourcing, an increasingly important driver of the economy, has grown tremendously in recent years.

Growth in 2014 is likely to be impacted as a result of Super Typhoon Haiyan (referred to as ‘Yolanda’ in the Philippines), which struck the Visayas region of the Philippines in November 2013 causing widespread devastation and the loss of over 6,200 lives. Post-typhoon reconstruction spending over the coming years has been estimated at USD8.2 billion.

Trade and investment

Total two-way trade was valued at AUD3.4 billion in 2013. Merchandise trade comprised the bulk of this trade at AUD2.1 billion, but services are an increasingly important component of our bilateral trade. Australian services exports to the Philippines in 2012-13 totalled AUD521 million, while Australian imports of Philippine services totalled AUD652 million. This trade in services was dominated by education-related travel, personal travel and business travel, reflecting our strong people-to-people links.

In 2013, Australia’s investment in the Philippines was valued at AUD7.7 billion and the Philippines invested AUD996 million in Australia. Several Australian mining companies have interests in the Philippines, mostly at the exploration and development stage.

Between 2010 and 2013 the Philippines climbed 30 places in Transparency International’s Corruption Perceptions Index, now ranking 94 out of 175 countries. The Philippines also achieved its first investment-grade credit ratings in 2013 and a higher ranking in the global competitiveness survey.

Australia and the Philippines are both parties to the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) – the most comprehensive trade agreement that ASEAN has negotiated. It delivers significant commercial benefits, while providing a basis for further regional economic integration, including the negotiations towards the Regional Comprehensive Economic Partnership (RCEP). Australia and the Philippines are both among the 16 RCEP participating countries (ASEAN plus its FTA Partners – Australia, China, India, Japan, Korea and New Zealand).

Information on doing business and opportunities in the Philippines

High level visits

February 2014: Minister for Foreign Affairs, the Hon Julie Bishop and Minister for Trade and Investment, the Hon. Andrew Robb participated in the fourth Philippines-Australia Ministerial Meeting (PAMM) in Manila, hosted by their Philippine counterparts, Foreign Secretary Albert del Rosario and Secretary of Trade and Industry, Gregory Domingo. A Joint Ministerial Statement was issued following the PAMM covering trade and investment, development, defence and security, the peace process in the southern Philippines, regional cooperation and the New Colombo Plan. Ministers agreed to work collaboratively to promote economic growth and new business opportunities, and to advance peace, stability and prosperity in the region.

December 2013: In the wake of Super Typhoon Haiyan, Minister for Foreign Affairs, the Hon. Julie Bishop discussed typhoon recovery and reconstruction with Foreign Secretary del Rosario and other members of the Philippines Cabinet. The Minister also visited areas affected by the typhoon, and met with Australian and Philippine humanitarian first responders on the ground in Tacloban, Ormoc and Leyte.

October 2012: Philippines President, His Excellency Benigno S. Aquino III visited Australia, meeting then Prime Minister, the Hon. Julia Gillard and then Governor-General, Her Excellency Ms Quentin Bryce in Canberra, and the NSW Premier in Sydney. They held wide-ranging discussions, issued a joint statement, witnessed the signing of a new Air Services Agreement between Australia and the Philippines, which will help lay the groundwork for increased trade and people to people links, and announced a development program which will contribute to building peace and stability in Mindanao by improving access to education.

April 2012: Then Governor-General of Australia, H.E, Ms Quentin Bryce, visited the Philippines. She met members of the Government of the Philippines, including President Aquino, with whom she discussed new opportunities for bilateral cooperation and our growing development assistance program. She also visited poverty alleviation and disaster risk management projects in Taguig City, Manila, which are supported through Australia's aid program.