Bounded in the west by the South China Sea (known locally as the West Philippine Sea) and in the south by the Sulu and Celebes Seas, the Republic of the Philippines borders Taiwan in the north and lies east of Vietnam. Of the 7107 islands making up the archipelago, only around 1000 are believed to be inhabited. A history marked by successive waves of human migration has shaped a multicultural present, with the archipelago being home to multiple ethnicities and dialects.
In the period since the Philippines achieved independence in 1946, the country’s politics has been marred by a considerable degree of political instability, internal conflict and corruption. Tackling these persistent challenges are important priorities for the current administration of President Benigno Aquino III, which aims to leave a legacy of good governance beyond its last year in 2016. The country’s abundant biodiversity, natural resources and youthful demographics are all assets that have garnered recognition from investors in recent years. Sustained economic growth and the Philippines’ newly attained investment grade status notwithstanding, the maintenance of peace in the Mindanao region and persistent poverty levels remain key areas to address as the country prepares for its successful integration into the ASEAN Economic Community in 2015 (see analysis).
Geography & Climate
The Philippine archipelago, which is situated in the Western Pacific Ocean, is divided into three distinct administrative and geographic regions, represented by the three stars on the country’s flag. The northern region of Luzon, home to the capital city of Manila and the source of 33% of GDP, is the economic, financial and administrative hub of the country as well as its industrial base. Visayas comprises the Philippines’ central islands, where many of the country’s abundant biodiversity and tourism assets are located, whereas Mindanao, the country’s second-largest island, makes up the southernmost region. Its economy is largely rural, and vast natural and mineral resources have remained untapped due to an ongoing peace process with local rebel groups. In addition, the country is subdivided into 17 regions, with Metro Manila or the National Capital Region comprising 16 highly urbanised cities and one municipality.
The nation’s strategic location as a gateway between the Pacific and the rest of Asia, in particular given its proximity to the region’s two largest economies, China and Japan, provides it with several vital sea routes for trade and commerce. Most of the archipelago’s mountainous islands are volcanic in origin and covered by tropical rainforests, with the highest mountain being Mount Apo in Mindanao at 2954 metres above sea level, whereas the Galathea Depth is the deepest point in the country and third deepest in the world.
The climate is predominantly hot and humid, and marked by heavy rainy seasons from the months of June until November. During that period, the south-west monsoon brings a considerable amount of rainfall. The other two seasons are cool and dry from November to February, and hot and dry weather from March to May. The Philippines’ geographical location close to the equator has also made it subject to a total of up to 15 typhoons every year. For example, November 2013 saw the arrival of the deadliest cyclone recorded in the Philippines’ modern history, Typhoon Haiyan, which traversed the Eastern Visayas region, killing an estimated 5268 people and costing more than $1.36bn in damages and relief. The country also experiences an average of 20 earthquakes a day.
Population
At an estimated 101.2m in 2014 – a figure expected to jump to 102.9m by 2015 – the Philippines is the 12th-most-populous country in the world and the seventh most populous in Asia. Population growth stands at 1.89%, and the country is projected to enter a demographic window in 2015 where 70% of its population is of working age, namely under the age of 35 by the end of 2013, with a median age of 22.2.
Moreover, around 12m Filipinos currently live and work overseas, forming one of the world’s largest diasporas. This has generated a steady flow of remittances into the country, amounting to $26.92bn in cash and non-cash remittances in 2014.
Recent History
In the immediate aftermath of its independence in 1946 (see overview), the Philippines experienced a period of economic growth that largely continued under the rule of President Ferdinand Marcos. However, widespread allegations of corruption, authoritarianism – he declared martial law in 1972 – and the 1983 assassination of opposition leader Benigno Aquino led to his ouster through the peaceful ‘People Power’ revolution of 1986. The movement brought Corazon Aquino, Benigno’s widow, to power.
Cycles of economic and political instability characterised much of the following decades, as the Philippines continued to face social unrest. The elections of May 2010 saw the late opposition leader’s son, Benigno “Noynoy” Aquino III, elected to office. His administration’s efforts to stamp out corruption and attract more foreign investment have been widely praised by both the local and international business community.
Religion & Culture
Boasting the fifth-largest Catholic population in the world, the Philippines is one of only two Asian countries with a Christian-majority population (the other being East Timor). Over 90% of Filipinos identify as Christian: 81% are Roman Catholic, 5% are Protestant, while the remainder belong to other Christian denominations. Muslims comprise 4% of the population, and are concentrated primarily in the southern Autonomous Region in Muslim Mindanao.
Although the US occupation of the Philippines lasted for only 48 years, its influence on the archipelago’s culture will seem prominent to visitors, from numerous fast-food restaurants and shopping malls to Filipinos’ affinity for rock music, basketball and boxing. The country’s cuisine and language have also been heavily influenced by nearly four centuries of Spanish colonial rule.
Language
Although over 180 native languages and dialects are spoken throughout the Philippines, only two languages are official: Filipino, which is largely based on Tagalog, and English. Tagalog belongs to the Malayo-Polynesian group of languages, but Spanish has heavily influenced its modern-day variant. At the same time, Filipinos’ strong command of the English language, combined with their hospitable nature, has been an appealing asset sought after by multinational companies. A combination of Tagalog and English, aptly named “Taglish”, is popular among young Filipinos and can be heard on radio and television programmes.
Education
As one of only three countries in the world, along with Djibouti and Angola, to have a 10-year basic school system, the K-12 Programme was signed into law by President Aquino in May 2013 to put Philippine education on a par with the rest of the world. The new 12-year curriculum will see a mandatory kindergarten year and two additional senior high school years added to the traditional 10-year model, which included six years of primary school followed by four years of secondary education. By constitutional decree, education receives the largest portion of spending in the budget. The high priority accorded to education is a legacy of US rule, which set up a system of universal and free basic education. Tertiary education consists of a four-year programme, modelled after the US university system. Over 2m Filipinos attend the country’s 2000-plus higher education institutions every year.
Natural Resources
Named by the Asian Development Bank as the fifth-most-mineralised country in the world, 30% of the Philippines’ total land area of 30m ha are believed to contain metallic mineral deposits, including nickel, cobalt, silver, gold, salt and copper. The rich minerals found in the country are mostly a product of its volcanic history due to the country’s position along the Pacific Rim of Fire. The volcanoes also contribute significant geothermal resources, making the Philippines the second-largest global geothermal energy producer behind the US.
Despite abundant resources, mining has remained underdeveloped, with only 1.5% of the country’s land area covered with mining permits and mining contributing to just 1% of GDP. Similarly, while many of its neighbours have seen significant development of oil and gas deposits, the Philippines has remained largely dependent on energy imports. With an estimated 1.8trn cu feet and 2.7trn cu feet of reserves, the Galoc oil field and Malampaya gas-to-power project are the most prolific energy assets developed thus far, although they are smaller wells by global standards. Numerous areas in the South China Sea have received attention, though these areas are contentious due to territorial disputes between China and its Asian neighbours.
Of the country’s total land mass, only 19% is arable, of which 16% of is used agriculturally. The islands’ most important crops include rice, corn, sugarcane, coconut, abaca and tobacco, while rice and corn remain the most important sources of food. Although the country continues to import rice for its buffer stock, total import volume has decreased significantly, from 2.4m tonnes in 2010 to an expected 500,000 tonnes in by 2015. This is in accordance with the government’s aims of achieving self-sufficiency in the cultivation of rice, as well as the goal of food security more generally.
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