Economic overview
The Philippine market is a developing and expanding market that has good opportunities for the export of UK goods, expertise and services. The Philippine market is integral for the UK’s commercial success, and is worth £279.6 million to UK exporters. UK imports from the Philippines in 2005 amounted to £724.4million. This value places the UK as the 15th largest exporter to the country. The Philippine society is consumer orientated with abundant opportunity sectors, Power, Transport, Water, Construction, Oil and Gas, and Environmental Technology; these openings partially originate from the developing privatisations and reforms of a number of the above sectors. Tourism is also rising from 2.3million visitors to 2.6million arrivals in 2005.
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Opportunities • Power GDP: US $95.5 billion |
| Top ten UK Exports to the Philippines (£ thousands) 1. Electrical Machinery 58,400 2. Manufacturers of metals 38,962 3. Medical and pharmaceuticals 28,780 4. Office machinery and automatic data processing machines 27,211 5. Essential oils, perfume materials and cleaning materials 11,931 6. General industrial machinery and equipment 9,400 7. Miscellaneous manufactured articles 9,031 8. Iron and steel 9,004 9. Specialised industrial machinery 7,865 10. Power generating machinery 7,583 Total UK exports to the Philippines £279.6 million. |
Top ten UK imports from the Philippines 1. Electrical Machinery 339,604 2. Office machinery and automatic data processing machines 206,202 3. Clothing 52,005 4. Miscellaneous manufactured articles 15,233 5. Road vehicles 14,550 6. Fish, shell fish and related products 10,540 7. Vegetables and fruit 9,426 8. Pulp and waste paper 7,255 9. General industrial machinery 6,752 10. Furniture, cushions etc 5,682 Total UK imports from the Philippines £724.4 million |
| Top Export Partners: Japan 20.1%, USA 18.2%, Netherlands 9%, Hong Kong 7.9%, China 6.7%, Singapore 6.6%, Taiwan 5.6%, Malaysia 5.2% |
Top Import Partners: UK 18.8%, Japan 17.4%, Singapore 7.8%, Taiwan 7.3%, South Korea 6.2%, China 6%, Malaysia 4.5% |
Potential Growth Drivers: Improved VAT collections/Fiscal reforms, Infrastructure development, Power sector privatisation, Mining, Booming sectors e.g. BPO/IT outsourcing, tourism and finance.
Potential Growth Challenges: Tax revenue leakage, slow infrastructure development, opposition to mining investments, slow privatisation.
Total percentage export growth: 14%
Total percentage import growth: 6.3%
UK Trade Relations and Investment
| The Philippines are an important political and economic partner for the UK. As well as the marketing opportunities that the Philippines provides for the UK economy it also acts as a major recruitment country for nurses, with over 40,000 Filipino nurses working in the UK, and a close government ally. The first British Consul General arrived in the Philippines in 1844 and diplomatic relations has progressed since then; the post, in 1955, was upgraded to an Embassy. The British Embassy is based in Manila and works to continue developing bilateral relationships. The two countries are now enjoying longstanding good relations and trade. Both the Philippines and the UK, as outward looking island nations, are committed to healthy democracy, trade and investment. The relationship between the UK and the Philippines is increasingly advantageous to both economies and societies. |  |
• Assistance and knowledge is shared to combat global terrorism
• The good relationship facilitates the maximisation of commercial opportunities for UK companies.
• The relationship allows for the success of 200 active British companies in the Philippines. Ranging from Multinational companies to smaller singularly owned companies.
• Shell and HSBC are among many that operate in the Philippines
• A number of British companies are also involved in successful franchise projects, such as, Debenhams, M&S, Top Shop and Lush.
The UK has been a significant investor in the Philippines and in the last ten years has invested US $17.5billion, this accounts for 6% of total direct investments and 32% of portfolio investments.
• The British council is an active partner in the Philippine reform agenda, working with the Commission on higher education issues, English language teaching and the development of other government departments.
International Trade Relations
The Philippine archipelago although has no land boundaries is surrounded by many countries, Malaysia and Indonesia to south, China and Taiwan to the North, and many other strong trading countries. Therefore the international relations between the Southeast Asian countries are important. The Philippines was a founding member of the ASEAN (Association of South-East Asian Nations) in 1967. Malaysia and the Philippines work closely to ensure the success of negotiations with the Moro Islamic Liberation Front (MILF). There have been some tensions and disagreements between China and the Philippines but are being resolved under ASEAN Codes of Conduct recently signed by all parties.
Assistance
The UK supports the Philippines mainly through a DFID funded grants scheme to aid poverty-reduction projects in several areas, environment, healthcare, agriculture, and enterprise developments.
Human Rights
The Philippine human rights system has seen vital improvements since the Martial Law era, but there are still some reported discrepancies. The Philippines are striving to comply with all core UN human rights treaties and have a functioning democracy, civil society and more open media coverage. However there is a widespread awareness of allegations of torture and judicial killings. There is an underlying current of corruption, widespread poverty, and poor prison conditions. The government is aware of these issues and does co-operate with the independent Philippine Commission on Human Rights.
• The death penalty is still a serious concern within the Philippine legal system and was reintroduced in 1993.
• President Arroyo is vowing to certify a pending bill to abolish capital punishment.
• Positive steps towards the freedom of religion, association and expression are recognised. But journalists investigating crime and corruption have been murdered; around 75 since 1986.
• Violence towards women remains a serious human rights concern, some legislations to criminalise domestic violence has been passed.
• There are over 100 000 street children suffering sexual abuse and prostitution. The British Embassy in Manila is involved in projects to rehabilitate these children and improve the situation.
Political History
| The Philippines have been inhabited since the eleventh century by Malays who settled on the pre-colonial islands. The country has seen many changes in its political situation and occupation. The clash of different political groups, separatist parties and insurgents has become a more prominent problem for the Philippines since the beginning of the 20th Century. Corruption, within the government, has also caused problems alongside the civil disruption. |  |
Timeline
1565 First Spanish settlement was established in the Philippines, after it was discovered by the Europeans in 1521.
1890’s Discontent with the Spanish rule begins.
1896 A nationalist movement develops, and the revolution begins. Dr Jose Rizal, a national hero, is also executed.
1898 US Navy destroys Spanish fleet in Manila Bay. Spain relinquishes occupation to the US in the Treaty of Paris. The nationalist leader, Emilio Aguinaldo, declares independence but the US claims military rule.
1899 Insurgent activity against US forces begins.
(Emilio Aguinaldo is captured 1901 and fighting continues until 1902)
1902 US civil government replaces military rule. The Americans also introduce an elective political system to hopefully grant eventual Filipino independence.
1935 Establishment of the Commonwealth of the Philippines is approved. Manual Quezon is the first president.
1941 Japan attacks the Philippines
1946 Full independence and establishment of the Republic of the Philippines. (For the next twenty years Filipino politics was dominated by two major political parties, but corruption was still a concern)
1965 Ferdinand Marcos elected president.
1972 Martial law declared by Marcos, parliament is suspended, opposition politicians are arrested, and censorship is imposed.
1973 New constitution gives Marcos absolute power.
1977 Opposition leader, Benigno Aquino, is sentenced to death. But it is delayed and in 1980 he travels to US for medical care.
1983 Upon return to the country Aquino is shot dead as he leaves his plane.
1986 Marcos is opposed by Aquino’s widow in presidential elections. There are mass protests as Marcos declares himself the winner. The military withdraw their support for him and Marcos flees the country for Hawaii.
1992 Aquino’s defence minister, Fidel Ramos, wins presidency.
1996 Peace agreement reached with Moro National Liberation Front (MNLF), but Moro Islamic Liberation Front (MILF) carries on its campaign.
1998 Joseph Estrada is elected president
2000 Allegations of corruption, betrayal of public trust, and violation of the constitution are made against Estrada
2001 Impeachment trial is suspended on January 16th, but there are mass protests. The military withdraw their support for Estrada and he stands down. The vice-president, Gloria Arroyo, is sworn in as president.
2001 In March the MILF declares a ceasefire and agrees to talk with the government
2001 In April Estrada is charged and arrested.
2002 Series of bomb blasts blamed on Islamic militants.
2003 In February MILF and government ceasefire breaks down after rebel attacks.
2003 Ceasefire resumed between government and MILF. There is an Army mutiny in Manila, involving 300 soldiers who seize a shopping centre. The incident is resolved with peaceful negotiations.
2004 In June, Gloria Arroyo is announced to have won the May’s presidential elections.
2005 The July 2003 ceasefire is broken as heavy fighting breaks out between Filipino troops and MILF rebels.
2005 Between July and September President Arroyo is put under pressure to resign, as allegations of vote-rigging have arisen. Yet she survives an impeachment attempt by her opposition.
2005 Further fighting this time between Filipino troops and Muslim Abu Sayyaf rebels on the island of Jolo, many deaths are reported.
2006 In June the death penalty is abolished (It was scrapped in 1987 but had since been reinstated).
Current government
President: Gloria Macapagal Arroyo
Foreign Minister: Alberto Romulo
Finance Minister: Margarito Teves
