Republic of the Philippines country brief
Political overview
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 as President and Vice President respectively. The Aquino Administration has outlined a major reform agenda focussed on eliminating corruption and alleviating poverty.
Conflict in the Southern Philippines
Bursts of unrest and violence between the Philippine Government and Moro separatist groups continue in the southern Philippines, particularly in central and western Mindanao.
Peace talks between the Philippine Government and the Moro Islamic Liberation Front (MILF) recommenced in July 2009. The talks had previously faltered when fighting broke out in August 2008, resulting in the internal displacement of several hundred thousand people. President Aquino flew unannounced to Japan and met with MILF Chairman, Ibrahim Al Haj Murad on 4 August 2011, the first time that talks between the Philippine Government and the MILF had been held at that level since negotiations commenced 14 years ago.
The Australian Government’s travel advice contains up to date information about the very high risk associated with travel to central and western Mindanao, including the Zamboanga Peninsula and the Sulu Archipelago, and eastern Mindanao. Australians are strongly advised not to travel to these areas due to the very high threat of terrorist attack, kidnapping, violent crime and violent clashes between armed groups.
Economic overview
Following a rebound in GDP growth after the Global Financial Crisis of 7.3 per cent (year on year) in 2010, economic growth is expected to slow to 3.7 per cent in 2011. Weak external demand coupled with a significant slowdown in public spending continues to be a drag on growth.
The macro-economic fundamentals for the Philippine economy remain strong. Inflation and interest rates are low and the currency is stable. Overseas Filipinos' remittance income, which accounts for more than 10 per cent of the Philippine economy, remains remarkably resilient and continues to support domestic consumption. Philippine exports contracted in 2011, including because of weak demand for electronics in the EU, Japan and the US. Business Process Outsourcing, an increasingly important driver of the economy, has grown tremendously in recent years. The Philippines now rates behind only India in a sector that has diversified beyond call centres.
Tight government spending had restricted growth over the past 12 months, but on 14 October 2011 President Aquino announced a PHP 72 billion stimulus package targeting infrastructure and poverty alleviation. The Government has shown a commitment to economic reform which has the potential to open up areas for economic cooperation in both trade and investment.
Bilateral relationship
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 assistance.
The two countries have growing people-to-people links through trade, investment, cultural exchange, tourism and migration. Significant numbers of Filipinos immigrated to Australia between the 1960s and the 1990s. Filipinos remain one of the fastest growing immigrant communities in Australia with over 4,800 applications from Filipino students to study in Australia in 2010. At the 2006 Census, 160,000 Australians claimed Filipino ancestry, up from 129,000 in 2001. 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.
Total two-way trade was valued at $2.6 billion in 2010. The Philippines is Australia’s 24th largest trading partner and Australia is the Philippines’ 17th largest trading partner. The ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) represents an important opportunity to boost the bilateral trade and investment relationship. The Philippines is Australia’s eighth largest mineral market with a total value of $344 million. Based on a land mass comparison, the Philippines is considered to be the fifth most mineralised country in the world. Several Australian mining companies have interests in the Philippines, mostly at the exploration and development stage, making Australia a major foreign investor.
Services are also an increasingly important component of our bilateral trade, reflecting our strong people-to-people links. Trade in services between Australia and the Philippines in 2010-11 was comprised of $419 million in exports and $530 million in imports. Major Australian service exports to the Philippines were education-related travel ($188 million) and personal travel services ($74 million). Major service imports from the Philippines were personal travel ($380 million) and business and professional travel ($56 million).
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.
Government-to-government links
The former Australian Minister for Foreign Affairs, Kevin Rudd, had fruitful discussions with the Philippine President, Benigno Aquino III, and the Philippine Foreign Secretary, Albert del Rosario, during his 20-21 October 2011 visit to the Philippines.
Mr Rudd and the Minister for Trade, Craig Emerson, hosted the third Philippines-Australia Ministerial Meeting (PAMM) in Canberra on 16 June 2011 with their Philippine counterparts, Foreign Secretary Albert del Rosario and Secretary of Trade and Industry, Gregory Domingo. They issued a Joint Ministerial Statement covering counter-terrorism, defence and security, the peace process in southern Philippines, development assistance, trade and investment, and regional and multilateral engagement.
The two countries share common perspectives on many regional, economic and security issues. Australia and the Philippines share a common interest in cooperating in regional affairs through fora such as the East Asia Summit, APEC and the ASEAN Regional Forum. Both Australia and the Philippines are active members of the Cairns Group, a coalition of 17 agricultural exporting countries. The two countries have also signalled their common interest in combating transnational challenges such as climate change.
Development assistance
Australia is the largest grant aid donor to the Philippines, with official development assistance in 2011-12 of $123 million, up from $118.1 million in 2010-11. Australia's aid to the Philippines is focused on education, economic growth, stability and human security. See AusAID's website for additional information.
Defence and security cooperation
Australia's annual bilateral defence cooperation budget is on average $4.0-4.5 million, with activities including high level policy talks, training of approximately 130 Philippine defence personnel in Australia, and visits by senior officials. The defence relationship is focussed on counter terrorism, maritime security and assistance to the Philippines Defence Reform Program.
During then President Arroyo's visit to Australia in May 2007, a bilateral Status of Visiting Forces Agreement was signed, and is currently awaiting ratification by the Philippine Senate. 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.
Updated Feburary 2012