LOCATION

The Philippines is an archipelago of 7,107 islands. It is bounded by the South China Sea in the West, the Pacific Ocean in the east, the Sulu and Celebes Sea in the south, and the Bashi Channel in the north. The northernmost tip of the country is 241 kilometers south of Taiwan while the southernmost tip is just 14.4 kilometers north of Borneo.


AREA

The total land area of the archipelago is approximately 300,000 square kilometers. The three largest island groups are Luzon with an area of 141,395 square kilometers, Visayas with 56,606 kilometers, and Mindanao with 101,999 square kilometers.

The archipelago is further subdivided into regions, provinces, cities, municipalities and barangays. There are 16 regions, including the National Capital Region (NCR), the Cordillera Administrative Region (CAR), CARAGA and the Autonomous Region In Muslim Mindanao (ARMM). Metropolitan Manila has been designated as the National Capital Region and is composed of the cities of Manila, Quezon, Pasay, Mandaluyong, Caloocan, Makati, Pasig, Muntinlupa, Las Pinas, Marikina, Valenzuela and Paranaque and the municipalities of Malabon, Navotas, Pateros, San Juan, and Taguig.

There are 79 provinces, 113 cities, 1,496 municipalities and 41,943 barangays.


CAPITAL

Manila


CLIMATE

The climate is tropical. The rainy season is from June to October, the cool dry season is from November to February, and the hot dry season is from March to May. Temperatures range from 21 to 32, with the average at 27. Average humidity year round is 77%. All regions are exposed to typhoons, which are prevalent during the rainy season.


POPULATION

The Philippines has total population of 76.4M as of May 1, 2000. Population density is 255 persons per square kilometer.


LANGUAGE

The national language is Pilipino, derived mostly from Tagalog. There are about 70 other local languages and dialects spoken. The major ones are Cebuano, Ilocano, Hiligaynon, Bicol, Waray, Pangasinense, Pampango and Maranao. English is widely spoken and understood. Spanish and Chinese are still spoken by a minority.


BRIEF HISTORY

Filipino society and culture were fairly well developed prior to contacts with other countries as documented from archeological artifacts recovered.

Some 500 years before Ferdinand Magellan set foot in the Philippines, the Filipinos had commercial relations with China, Indo-China, Malaysia, India and Arabian countries. Chinese silk, porcelain, jars, gold, ivory, and beads were traded for wax, bird’s nest, teakwood, rattan, pearls, precious stones and other marine and forest products.

On March 16, 1521, Ferdinand Magellan claimed the Philippines for the Spanish crown and brought great changes in the political, social and cultural life of the people. Christianity was introduced and centralized government was established. By the beginning of the 17th century, Spain’s sovereignty over the Philippines had been fully established. Spain’s rule for over three centuries was marked by sporadic revolts.

The first Filipino revolt was led by Lakandula, the last King of Manila, in 1574 to castigate the Spaniards because of their reneged promise to exempt the Filipinos from tribute and forced labor. The revolt was terminated when the Filipinos were promised better treatment. Many of the revolts were caused by the people’s desire to win back their freedom and others were prompted by Spanish oppression.

The bloody climax of Filipino struggle for freedom was the Revolution of 1896, which was also the culmination of revolts against Spanish rule. The national hero Dr. Jose Rizal led a reform movement in the 1880s, which eventually led to the 1896 revolution. Dr. Rizal was tried in Manila and was sentenced to die by musketry.

His death fuelled the fires of revolution and on June 12, 1898, leaders of the revolution declared the country a sovereign state and proclaimed the first Republic of the Philippines.

While the revolution embroiled the country, Spain declared war against the United States because of the latter’s intervention over Cuba’s fight for independence. Cuba was then a colony of Spain. Spain was defeated and on December 10, 1898, the Philippines was formally ceded to the United States by virtue of the Treaty of Paris. The occupation of the American was resented by the Filipinos and the outcome was the Filipino-American War which lasted for three years.

After several attempts of Filipino patriots to secure an act to grant independence from the United States, the Philippines was able to obtain the approval of the Tydings-McDuffie Independence Act, which provided for the establishment of a Commonwealth government to end after a ten-year period, and the adoption of a Constitution. A Constitutional Convention drafted the Constitution which was ratified on May 14, 1935. The election of Commonwealth officials followed, with Manuel L. Quezon as President, and Sergio Osmena as Vice President. On November 15, 1935, the new officials assumed office and thus began the ten-year period of self-government.

This was interrupted when the Philippines was drawn into a war in the Pacific as an ally of the Americans against the Japanese. Japanese troops occupied Manila in 1942 and for three years, the Filipinos suffered the ravages of war.

The liberation of the country was fully attained in February 1945, marking the start of the country’s massive rehabilitation and rebuilding out of the devastation brought about by the war.

On July 4, 1946, a year after the end of the war, the American flag was lowered and the Philippine flag was hoisted, signaling the recognition of Philippine Independence from the U.S.


GOVERNMENT

The Republic of the Philippines, a democratic and republican state, has a presidential form of government under a new Constitution promulgated in 1986 and ratified by the people on February 2, 1987

The 1986 Constitution provided for a tripartite system: the Executive, represented by a President elected by direct vote of the people for a six-year term; the Legislative, represented by a bicameral Congress, composed of the Senate and the House of Representatives; and a Judiciary, with the power of judicial review.

Executive power is vested in the President, who is assisted by the Cabinet. The President is the head of the Cabinet, which is responsible for formulating key policies and carrying out executive functions. The President is the Commander-in-Chief of the Armed Forces.

The Congress has exclusive lawmaking powers. The Senate has 24 Senators elected at large and the House of Representatives has 219 Congressmen elected by district and by party list. The Judiciary is composed of the Supreme Court, the Court of Appeals and other inferior courts. The Supreme Court has a Chief Justice and 14 Associate Justices appointed by the President.


RELIGION

The predominant religion is Roman Catholicism. Roman Catholics make up nearly 85 percent of the population. The other religions are Protestantism and Islam.


CURRENCY

The official monetary unit is the peso. The exchange rate varies from day to day. As of July 27, 2001, one US dollar fetched P 53.50


ECONOMY

For the first quarter of 2001, Gross Domestic Product grew by 2.5%, slower than last year’s first quarter growth of 3.3%. The political developments in the country likewise significantly affected investments, which rose a mere 0.1% in the first quarter. The slowdown in the world economy led to a fall in Philippine net exports by 65.9%.

The industrial sector continued to post weak growth of 0.1%. Manufacturing held up a bit with a growth rate of 2.4%, compared to 6.0% in the same period last year. Construction contracted by 10.6% as both public and private construction fell.

There, however, were resilient sectors such as agriculture and services. Agriculture posted a 2.3% growth rate, boosted by crops, livestock, fishery and poultry. The services sector benefited from the strong growth in communication (24.9%); retail trade (5.6%) and private services (7.0%)

Beginning in the second quarter, however, some indications of a pick-up growth are seen. On the demand side, a strong rebound of public investments is noted as national government capital expenditures expanded in April and May by 47.8% following the 24.6% contraction in the first quarter. Approved investment projects in the first six months of the year also improved: BOI-approved projects rose 205.4% while PEZA approved projects increased by 19.4%.

Merchandise exports rose by 6.5% in April after several months of decline. What is noteworthy is the growth in raw materials and intermediate goods for two consecutive months (March – April) after more than a year of decline. Imports of office and EDP machines were also robust.

In April, the volume of industrial production exhibited a strong growth of 12.7% while sales volume growth rose 6.2%.

In agriculture, the Bureau of Agriculture Statistics forecast palay production to grow by 7.5% in the second quarter.

The pick-up in real sector recovery beginning in the second quarter is evident in the labor market data for April. Almost 2 million jobs were created compared to a loss of about 1 million jobs over the same period last year. As a result, unemployment rate fell from 13.9% in April 2000 to 13.3% in April 2001. (April unemployment rate is normally the highest due to seasonality factors: new graduates and school – age workers flock to the labor market during the month.)

Given these indicators, a GDP growth of about 2.8 – 3.0% is expected in the second quarter. While this is slightly lower than the 4.3% growth for the same quarter a year ago, it nonetheless rules out the onset of a recession.

The recent volatility of the peso is partly global and partly due to real or demand factors. The peso has been dragged down by the global strengthening of the dollar. It is noteworthy, however, that the peso has been gaining against the Euro (3.22%) and the Yen (2.46%). This mitigates the impact on inflation of the peso depreciation against the US dollar. The peso is expected to gradually stabilize as monetary authorities continue to implement prudent policies.

The average inflation rate in the first two quarters of 2001 reached 6.7%, still within the government’s target of 6.0 – 7.0%. Inflation is expected to slightly rise to 6.8% in July, given the impact of the recent typhoon on vegetable price and the oil prices hikes.

A GNP growth of 3.3 – 3.8% in 2001 can be expected, considering the early leading indicators and the expected impact of the package of policy measures being launched by President Gloria Macapagal Arroyo. Growth is projected to strengthen in 2002 following the global economic recovery.