Philippines
The Philippines were ceded by Spain to the US in 1898 following the Spanish-American War. They attained their independence in 1946 after being occupied by the Japanese in World War II. The 21-year rule of Ferdinand MARCOS ended in 1986 when a widespread popular rebellion forced him into exile. In 1992, the US closed down its last military bases on the islands. A quarter-century-old guerrilla war with Muslim separatists on the island of Mindanao, which had claimed 120,000 lives, ended with a treaty in 1996.
While there are currently no known specific threats against expatriates in the Philippines, the security situation in some rural regions remains volatile. In addition, in March and April 2002 a number of small explosive devices were found in Manila reportedly placed by an obscure group calling itself the Indigenous People´s Federal Army. Crime, both petty and organized, is a continuing concern throughout the islands.
Former Vice-President Gloria Macapagal Arroyo was installed as president on January 20, 2001 after former President Estrada left office. Following Ms. Macapagal Arroyo's inauguration, key economic indicators recovered. For example, the Philippine peso, which had dropped to 55.75 per U.S. dollar rose to 47.50 per U.S. dollar and the stock market rose 17.6%, its largest one-day gain ever. Arroyo was elected vice-president in 1998. Arroyo comes from the political elite in the Philippines. She is a trained economist, whose father was president in the early 1960s.
Despite the Philippines having weathered the Asian economic crisis better than many of its Southeast Asian neighbors (real gross domestic product (GDP) shrank just 0.6% in 1998), the Philippines faces some important challenges. Real GDP growth, compared to many of its neighbors, is low. Interest rates are high, and the large public debt makes lowering them problematic. Issues of land reform and economic inequality remain unaddressed, and there is the problem of tax-evasion that contributes to the country's fiscal deficit ($3.1 billion in 2000). The new administration has made better revenue collection and privatization a priority in order to lower the budget deficit. In addition to privatization, reform of certain sectors of the economy, particularly the electric power sector, are pending legislative approval. Lengthy power outages were a major drain on the economy in the early 1990s, and well-planned reform is needed to prevent that from happening again. Many Filipinos with relatives working abroad receive remittances, which improves the country's economic situation.
The Philippines is one of the claimants, along with China, Brunei, Malaysia, and Vietnam, to the potentially hydrocarbon-rich Spratly Islands. Military skirmishes occasionally result from competing claims, especially between the Philippines and China.
Arroyo declared a unilateral cease-fire with the Muslim-nationalist Moro National Liberation Front (MNLF) and the army is preparing for talks with them as well as the communist New People's Army. However, the government is not in negotiations with the Abu Sayyaf rebels.
Although the New Peoples' Army is greatly reduced from its height in the 1980's, NPA insurgents remain active in mountainous and jungle areas, including some parts of Mindanao and Negros Island as well as Quezon Province and the Cordillera and Bicol regions of Luzon. In Mindanao, crime and insurgent activity may make travel hazardous to and within the provinces of Tawi-Tawi, Maguindanao, Lanao Del Sur, Lanao Del Norte, Sulu, Basilan, Zamboanga del Sur, Zamboanga del Norte, North and South Cotabato, and Sultan Kudarat.
The threat of terrorist action by extremists, both domestic and foreign, does exist in the Philippines. There are periodic reports of plans for possible kidnapping or terrorist acts aimed at foreign diplomatic missions, public and private institutions and transportation facilities. However, the majority of these reports have not been followed by terrorist action.
Kidnappings for ransom and extortion occur frequently. Usually, the victims are local businessmen or managers, often of Chinese decent. Nevertheless, there have been attempts directed against foreign corporate personnel. While not usually targets, recent threats have raised the risk for kidnappings of short-term visitors or tourists both in Manila and elsewhere.
