Republic of the Philippines country brief
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 - focusses 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 Bangsamaro 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 $6 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.
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 again 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 US$8.2 billion.
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.
On 20-21 February 2014, Foreign Minister Julie Bishop and Minister for Trade and Investment, 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.
During her visit to the Philippines on 8-9 December 2013, in the wake of Super Typhoon Haiyan, Foreign Minister Bishop discussed typhoon recovery and reconstruction with Foreign Secretary del Rosario and other members of the Philippines Cabinet. Ms Bishop also visited areas affected by the typhoon, and met with Australian and Philippine humanitarian first responders on the ground in Tacloban and Ormoc.
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.
Philippine President Benigno S. Aquino III visited Australia from 24-26 October 2012, meeting then Prime Minister Julia Gillard and the Governor-General 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.
The former Governor-General of Australia, Quentin Bryce, visited the Philippines from 11-14 April 2012. 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.
While the Philippines has experienced strong economic growth, more than 42 million Filipinos, close to half the population, survive on less than $2 a 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 one of the largest grant aid donors to the Philippines, with over $170 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 PAMM, Foreign Minister Bishop announced the Basic Education Sector Transformation (BEST) initiative. A six-year, $150 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 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. Almost 40 per cent of Australian aid is invested in Mindanao, including those areas affected by conflict. 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 $40 million in assistance, including the provision of medical teams, as well as the deployment of significant military assets and personnel. Australia is also partnering with the Philippine Government in long term programs to ensure communities are better prepared for natural disasters.
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.
Business and trade
Total two-way trade was valued at $3.43 billion in 2013. Merchandise trade comprised the bulk of this trade at $2.1 billion, but services are an increasingly important component of our bilateral trade. Australian services exports to the Philippines in 2012-13 totalled $521 million, while Australian imports of Philippine services totaled $652 million. This trade in services was dominated by education-related travel, personal travel and business travel, reflecting our strong people-to-people links.
In 2012, Australia’s investment in the Philippines was valued at $7.1 billion and the Philippines invested $911 million in Australia. Several Australian mining companies have interests in the Philippines, mostly at the exploration and development stage. The Australia-Philippines Business Council (APBC), established in 1975, provides a focal point for networking between Australian and Philippine business communities. The APBC's counterpart organisation in the Philippines is the Philippines-Australia Business Council.
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).
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.
Updated March 2014