AfricaAsia NorthAsia South and SoutheastBangladeshBruneiCambodiaIndiaIndonesiaLaosMalaysiaMaldivesMyanmarNepalPakistanPhilippinesSingaporeSri LankaThailandTimor LesteViet NamAustraliaEuropeLatin AmericaMiddle EastNorth AmericaPacific
Find MFAT's information paper on a country or territory. (We don't have information papers on all countries.)
New Zealand and the Philippines enjoyed a positive working relationship as ASEAN Dialogue Partners from 2003-2006.
New Zealand also has a close working relationship with the Philippines in regional and multilateral fora such as APEC, the Forum for East Asia and Latin American Co-operation (FEALAC), the WTO and the Cairns Group, the ARF and the ASEAN/Australia/New Zealand FTA process.
Development assistance has been an important part of the bilateral relationship. The country allocation is currently NZ$4m annually and is targeted at the development of sustainable rural livelihoods, primarily ecotourism and coastal management for local communities, and provision of post-graduate scholarships.
New Zealand and the Philippines concluded an Air Services Agreement in November 2007, which should lead to increased people-to-people links and easier travel between our two countries.
Bilateral Business Councils have been established in both countries and there have been several business missions in both directions. The Minister of Trade Negotiations visited Manila in March 2003 and a small Philippines business delegation visited New Zealand in October 2003. A high-level business delegation, led by Ambassador Donald Dee, also visited in March 2007.
Dairy products are by far the largest export item to the Philippines and Fonterra has engaged in some joint ventures within the Philippines. New Zealand companies in the Philippines are also involved in energy (eg. Fletchers, Designpower), infrastructure development (eg. Sinclair Knight Merz) and housing construction (eg. Pacific Development). The ANZ bank has one of ten foreign bank licenses. There is however little Philippines investment in New Zealand.
There is a relatively small Filipino full-fee paying student presence in New Zealand. However, NZTE reports growing interest in the Philippines towards New Zealand providers, as Filipinos are becoming increasingly aware of education opportunities available in other English speaking countries outside of the US.
The net migration of Filipinos to New Zealand last decade was approximately 4,000. The Filipino population in New Zealand is now between 20,000 and 25,000.
Although there is growing interest in New Zealand as a tourist destination, the Philippines market is an under-developed one. The lack of direct air links is a disincentive. In 2006, visitor arrivals to New Zealand from the Philippines increased by 16%, the largest percentage increase from South East Asia. In the year to December 2007, there were 8,308 visitor arrivals from the Philippines.
When President Arroyo visited in May 2007, a number of substantive outcomes were achieved. Two new bilateral arrangements were signed: an Arrangement for Cooperation in the Protection and Conservation of Natural Protected Areas between the Department of Conservation and the Department of Environment and Natural Resources; and an Arrangement on Law Enforcement Cooperation to Combat Transnational Crime between the New Zealand Police and the Philippines National Police. Our respective Human Rights Commissions are also looking are also collaborating in the area of human rights education and capacity building in the Philippines.
Land Area - 300,000 sq km (US Department of State 2005) Population - 96 million (Foreign and Commonwealth Office 2005 estimate) - Capital City - Manila - Language - Filipino and English are the official languages
Political system - Pluralist Democracy modelled on the United States with an executive presidency, a bicameral Congress and a Supreme Court that can rule on the constitutionality of government actions. - National government - Gloria Macapagal-Arroyo, who became President on January 20th 2001, won re-election in her own right on May 10th 2004 for a six year term. - National legislature - Bicameral Congress - Senate and House of Representatives. - National elections - The May 10th 2004 election was for the Presidency, the House of Representatives and one half of the Senate. The next are scheduled for May 2010. Mid-term elections for the House of Representatives and one half of the Senate were held in May 2007 - Head of State - President Gloria Macapagal-Arroyo
GDP - US$144.1billion (2007 estimate) - Real GDP growth - US$7.3% (2007 estimate) - Exports - US$49.32 billion (2007 estimate) - Imports - US$57.56 billion (2007 estimate) - Main exports - Semi conductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits - Main Destinations of Exports - Main destinations of exports China , US, Japan, Hong Kong - Main Imports - Electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic- Main origins of imports 2005 - Japan, US, China, Singapore - Current account balance - US$6.351 billion (2007 estimate) - Inflation - 4.4% (2008)
New Zealand Trade (to year ended Dec 2007) - NZ Exports (FOB) - NZ$667,376 million (for year ending December 2007) - Main Exports - Milk and Cream products, Buttermilk, Cheese, Butter, Kraft Paper, Fresh Milk, Veneer, Malt Extract, Timber - NZ Imports (CIF) - NZ$216,043 million (for year ending December 2007) - Main Imports - Petroleum Oils, Bananas, Dates, Figs, Electronic Integrated Circuits, Electric Transformers, Electric Accumulators, Telephone Equipment, Computers, Prepared Food - Total two way Trade - NZ$584,020,167 (Jun 2006)
From the time of independence, the Philippines economy has had a mixed history of growth and development. Now, with a population in excess of 88 million people, the Philippines is a large and growing market.
The Philippines government faces significant challenges in terms of ensuring domestic security, encouraging economic growth and balancing the budget deficit. Gloria Macapagal-Arroyo has come under pressure to cut short her presidency, which is due to finish in 2010. She has been accused of exaggerating threats to national security in order to allow the security forces increased freedom to deal with her political opposition.
Relations between New Zealand and the Philippines are friendly, and increasingly strong. The relationship has become more substantial in recent times with increasing trade. Two-way trade now exceeds NZ$883million per annum. A long-standing development assistance partnership adds strength to the bilateral relationship.
The history of the Philippines can be divided into four phases: the pre-Spanish period (before 1521); the Spanish period (1521-1898); the American period (1898-1946) and the years since independence (1946-present).
The first people in the Philippines, the Negriots, are believed to have come to the islands 30,000 years ago from Borneo and Sumatra. Malay people followed in successive waves. Chinese merchants and traders arrived and settled in the ninth century AD. In the 14th century, Arabs arrived, introducing Islam in the south and extending some influence into Luzon. The Malays remained the dominant group until the Spanish arrived in the 16th century.
Ferdinand Magellan reached the Philippines and claimed it for Spain in 1521. The country was named “Las Islas Filipinas” after King Philip II of Spain. The long period of Spanish rule (three centuries) was marked by numerous uprisings. The US gained possession of the Philippines after the Spanish-American war in 1898 and ruled the country for five decades.
On 4 July 1946 the country achieved full independence. The early years of independence were dominated by US assisted post-war reconstruction.
President Marcos imposed martial law in 1972. He cited growing lawlessness and open rebellion by the communist rebels as his justification. Corruption and favouritism under Marcos was deemed to contribute to a serious decline in economic growth and development under his reign.
The assassination of opposition leader Benigo (Ninoy) Aquino upon his return to the Philippines in 1983 (following exile), together with popular discontent with Marcos, set in motion a set of events that culminated in a snap presidential election in February 1986. The election was marred by extensive electoral fraud. Although Marcos officially ‘won’ this election the opposition rejected the result. The Church and elements of the armed forces also expressed their condemnation. Marcos fled the country and Opposition leader Corazon Aquino became President in February 1986.
With the end of the Marcos reign, a new Constitution was adopted in 1987. The return of democracy and governmental reforms in the post-Marcos era, however, was hampered by a massive national debt, governmental corruption, coup attempts, a communist insurgency and Muslim separatist movements.
Fidel Ramos succeeded Corazon Aquino in 1992. Early in his administration Ramos declared “national reconciliation” his highest priority. In June 1994, President Ramos legalised a general conditional amnesty covering all rebel groups, as well as Philippines military and police personnel accused of crimes committed while fighting the insurgents. In October 1995, the government signed an agreement bringing the military insurgency to a conclusion.
Joseph Estrada was elected President in 1998. He promised poverty alleviation and an anti-crime crackdown. By December 2000, however, his political credibility was damaged and he faced corruption allegations and an impeachment trial. Rallies calling for Estrada’s resignation increased in size and on 19 January 2001 the Chief of the Armed Forces, General Reyes, announced that the military had withdrawn its support for the Estrada administration.
On 20 January 2001 the Supreme Court found the position of the Presidency vacant and invoked the principle salus populi suprema lex (the welfare of the people is the supreme law) to swear in Vice President Gloria Macapagal-Arroyo as the President of the Republic of Philippines.
President Arroyo began her administration vowing to target corruption and work towards poverty alleviation. She also promised to stabilise the economy, (focussing on fiscal discipline) as the budget deficit had more than doubled in the period of political uncertainty.
As she came in over halfway through Estrada’s term, President Arroyo was in the unique position (under the Philippine constitution) of being able to stand for a second term in 2004. National elections for the President, Congress and half of the Senate, were held on 10 May 2004. After initially declaring that she would not be running, President Arroyo changed her mind and the campaign became be a contest between her and movie star Fernando Poe Jnr.
On 20 June 2004, more than six weeks after the Presidential election, a committee representing the Congress, announced that Gloria Macapagal-Arroyo had won. This tally was then referred to the Congress as a whole. Congress’ count put Arroyo with just over one million votes over Poe. The Presidential inauguration was held on 30 June 2004. In her 2004 State of the Nation Address, Arroyo focussed on the need to address problems of criminality and terrorism, and renewed her pledge to build a “strong republic”.
Impeachment charges were bought against President Arroyo in July 2005. The President was accused of tampering with the results of the May 2004 elections following a public airing of a taped conversation between the President and an electoral officer during the elections. She rejected calls for her resignation and the Congress rejected the charges in September 2005.
In her 2005 State of the Nation Address, following the attempted impeachment, the President indicated support for a ‘special constituent assembly’ to change the Philippine Constitution to establish a Parliamentary system of government rather than the current Presidential system.
On 24 February 2006 the President declared a state of emergency; due to alleged conspiracy to bring down the government after a section of the military took part in a mass anti-government demonstration. A newspaper office was raided and some high profile arrests of opposition figures were made. The state of emergency was lifted after seven days. Subsequently, there have been several other challenges to President Arroyo’s power and she continues to lack a popular support base, faces a hostile Senate, and has been forced to rely on the military to maintain political stability. Prospects of further impeachment charges have receded as a result of the 2007 mid-term elections. Although Administration candidates fared poorly in the Senate elections, the President’s control of the House of Representatives, in which impeachment charges would have to originate, was strengthened.
In the face of opposition, the President has engaged in defensive measures, perhaps to increase her popularity. Her decision in June 2006 to sign a law to abolish the death penalty is one example. This pronouncement drew strong support from the Catholic Church which has a considerable influence on public opinion.
The Arroyo Administration has been pursuing peace negotiations with both communist and Muslim insurgency groups, although long-lasting peace does not look likely, and the process continues to be complicated by constitutional and political factors, which have recently intensified. The issue of “ancestral domain” remains particularly contentious.
The Philippines is a developing country with a diversified economy, reflecting its varied resource endowment, both physical and human. Important sectors of the economy include services (54.5% of GDP) agriculture (13.8% of GDP) and industry (31% of GDP), particularly food processing, textiles and garments, and electronics and automobile parts. The best performing sector in recent years have been services, and in particular the financial sector, which had been boosted by strong inflows of remittances through the banking sector, and trade, which has been buoyed by strong growth in household spending. Mining is also of great potential and mining investment has risen considerably in recent years. Despite, the global economic climate, the Philippines economy has proven to be resilient and in 2007 grew by a near record rate of 7.3%.
In November 2005 a newly expanded Value Added Tax (VAT) law was instituted in an attempt to restrain the growing foreign debt and to improve government services such as healthcare, education, social security, and transport. This boosted confidence in the government’s fiscal capacity and helped to strengthen the peso. The peso continues to strengthen against the US. This VAT reform boosted 2006 tax revenue by 22%. The improvement in the government’s fiscal position has allowed strong growth in government spending in recent years, but government consumption spending only accounted for 9.7% of GDP in 2007.
In 2005 sluggish exports, high oil prices, and a weak agricultural sector saw GDP decrease to 5%, from 6.2% in 2004. However, GDP growth in 2006 (to 5.4%) and further growth in 2007 (to 7.3%), fuelled by increased electronic exports, growth in the outsourcing industry, and the increase in remittances from overseas workers, has helped fuel the economy. Strong private consumption growth, which accounted for 6.94% of GDP in 2007, has also contributed to some strengthening of the Philippines economy. However, a fall in exports in the first quarter of 2008 and a slowdown in private consumption growth, as households were hit by higher energy and food prices, reduced year-on-year GDP growth to 5.2% in January to March. Whereas the deficit on merchandise trade has risen in recent years, the current account balance has consistently strengthened, moving from a moderate deficit of US$2.2billion in 2000 to a comfortable surplus of US$6.4billion in 2007. The US and Japan were the Philippines two biggest export destinations, and main origins of imports last year.
Both the pace of economic growth and its potential have been held down over recent decades by the low level of investment, especially as compared with other Asian economies which have enjoyed a high level of investment. A number these economies have achieved investment to GDP ratio of 25-30% during their periods of strongest growth, while in China, the ratio exceeded 40% in 2007. By contrast, the ratio in the Philippines was just 14.8% of GDP. Unemployment levels are high at 8%.
The Philippines will have to tackle several significant problems in the future. Income inequality remains an issue, regional development is uneven, and China and India have emerged as major economic competitors. This combined with a forecasted decline in economic growth; increased inflation; and a deteriorating trade deficit, will provide particular economic challenges. Fiscal constraints continue to limit Manila’s ability to finance infrastructure and social spending.
Unrest in the south of the Philippines has been a constant feature of the post-independence Philippines.
In 2001 President Arroyo moved to reopen peace talks with the Moro Islamic Liberation Front (MILF), a Muslim separatist group in the south, and with the National Democratic Front (NDF), the front organisation of the communist insurgents who have been fighting the government for 35 years.
With the assistance of the Malaysian government, advancement on MILF issues has been made and a ceasefire was agreed in mid-2003 (although clashes with breakaway factions have continued to occur sporadically). The MILF’s principal demand is that the government address the matter of ancestral domain. The government wants the MILF to cooperate in operations against the international terrorist group Jemaah Islamiyah (JI). Although both sides purportedly want a peace settlement, there are forces on the ground in Mindanao that are hostile to a peace settlement on the terms currently on the table, and are therefore seeking to sabotage the process. Abu Sayyaf will not settle for anything less than an independent Muslim entity. Meanwhile sections of the military and some Christian community groups are opposed to any compromise.
While a peace agreement on the contentious issue of ancestral domain had looked likely, on August 4 2008, just before the agreement was due to be signed, the Supreme Court imposed a temporary restraining order on the agreement. The government has since disbanded its negotiating team, and is now refusing to engage with the MILF until it has disarmed. Government forces have been caught up in fierce fighting with the MILF rebels since the Supreme Court decision, and the outlook is now highly uncertain. However, the fact that both the government and the MILF want a peace agreement suggests that a peace deal will be brokered at some point, but concessions will be needed if there is to be a return to the negotiating table. In the meantime, the security situation is likely to remain dire. This source of instability is a major drain on the Philippines’ economic resources.
The Philippines was a founding nation of ASEAN (the Association of South East Asian Nations) and is active in the ASEAN Regional Forum (ARF). It is also a member the United Nations (UN), some of its specialised agencies, the Asia Pacific Economic Cooperation forum (APEC), the Non-Aligned Movement (NAM), the Asian Development Bank (ADB), the International Atomic Energy Agency (IAEA), the World Trade Organisation (WTO), and the World Bank.
The Philippines has traditionally had very close links with the United States, but the closure of the United States military bases in 1991 led to an increased emphasis on its Asian neighbourhood. The link with the United States was renewed in 2004 through a Visiting Forces Agreement, and regular “Balikatan” (shoulder to shoulder) exercises, which provide training to Philippine forces.
President Arroyo has been a strong supporter of US-led anti-terrorism activities and has pledged the Philippines support, including transit access for US forces. The Philippines also contributed to reconstruction in Iraq.
Tensions exist in the area of the South China Sea in regard to territory contested by the Philippines, China and other ASEAN countries, most recently in April 2004 when Viet Nam organised a “sightseeing” visit to the islands. The Philippines and China have agreed to not let the territorial dispute affect the bilateral relationship.
The Safetravel website provides a travel advisory for travellers to Philippines [external link].
