Resources and power
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Although the Philippines is rich in mineral resources, mining activities constitute only a small portion of GDP and employ an even smaller fraction of the population. Most of the country’s metallic minerals, including gold, iron ore, lead, zinc, chromite, and copper, are drawn from major deposits on the islands of Luzon and Mindanao. Smaller deposits of silver, nickel, mercury, molybdenum, cadmium, and manganese occur in several other locations. The Visayas are the principal source of nonmetallic minerals, including limestone for cement, marble, asphalt, salt, sulfur, asbestos, guano, gypsum, phosphate, and silica. Petroleum and natural gas are extracted from fields off the northwest coast of Palawan. Copper has remained the country’s primary mineral, although changing world market demands and investment incentives have rendered its production somewhat volatile.
Until the late 20th century, hydroelectric power supplied only a small proportion of the country’s electrical output, and thermal plants (most of which burned imported oil) supplied the major proportion. The completion of several dam projects on Luzon and the expansion of another project on Mindanao have increased the percentage of power generated by hydroelectric installations; irrigation and flood control have been additional benefits of some of the projects. Dependence on foreign oil has also been reduced by the construction of geothermal and conventional coal-fired thermal plants and, to some degree, by the exploitation of Palawan’s offshore petroleum reserves.
Manufacturing
Much growth in manufacturing took place in the Philippines in the 20th century, particularly in the 1950s and (after a slump in the ’60s) the ’70s. Since that time the sector has remained relatively stable, contributing roughly one-fourth of GDP, though it employs less than one-tenth of the workforce. The government has assisted the private sector by exempting certain new industries from taxation for a certain period. Only nominal taxes are imposed on selected industries, and loans on favourable terms are available to others.
Many factories are licensees of foreign companies or act as subcontractors for foreign firms, turning out finished products for export from imported semifinished goods. A large segment of the manufacturing sector, however, produces goods intended for domestic consumption. Major manufactures include electronics components, garments and textile products, processed foods and beverages, chemicals, and petroleum products.
Finance
The national currency, the piso, is issued by the Central Bank of the Philippines (Bangko Sentral ng Pilipinas). Banking operations are also conducted by several other government institutions, including the Land Bank of the Philippines and the Development Bank of the Philippines; the Philippine National Bank, formerly government-owned, was largely privatized in the late 20th century. All these banks were originally established by the government to encourage business, agriculture, and industry.
The National Economic and Development Authority (NEDA) and the Board of Investments were created in the late 20th century to help both public and private sectors in planning further economic development. Much of the initial capital investment of many private rural banks was provided by the government, and private development banks have likewise received government assistance. Many commercial and thrift banks have been established since the mid-1990s in response to increased liberalization, privatization, and the lifting of a ban on foreign banks. The Philippine Stock Exchange, though still relatively small, has been growing rapidly since weathering the Asian economic crisis at the end of the 20th century.
Trade
The Philippine government plans national economic development through the NEDA and other agencies. In so doing, it has sought to increase economic independence. In 1979 the government signed the General Agreement on Tariffs and Trade (GATT) rather than renewing a preferential trade agreement with the United States that had ultimately hindered Philippine economic development. The Philippines became a member of the World Trade Organization (WTO) in 1995. Although the United States and Japan have continued to be the Philippines’ top trading partners, a number of new markets have been emerging, especially in China, Singapore, and other countries of East and Southeast Asia. The Philippines’ principal exports include electronic equipment, garments and accessories, coconuts and coconut products, and minerals (copper, gold, and iron ore). The principal imports are machinery and transport equipment, fuels, chemicals and chemical products, and food.
Services
The service sector is the principal single component of the Philippine economy, contributing more than two-fifths of GDP and employing more than one-third of the country’s labour force. Trade and hospitality services together constitute the largest employer in the sector. Public administration and defense account for less than one-tenth of GDP and an even smaller portion of employment. However, the government engages in business in its own right, owning such enterprises as the National Development Company, the Philippine Ports Authority, the Philippine National Railways, and many other entities. With ongoing privatization, however, the number of corporations owned and controlled by the government has been decreasing.
Tourism has been growing steadily. Most international visitors come from South Korea, the United States, and Japan, but the number of Malaysians, Singaporeans, and residents of other Asian countries is increasing. Metro Manila and Cebu are among the most popular destinations, as are such resort areas as Boracay Island, just off the northern tip of Panay.
Labour and taxation
The trade union movement is well established in Manila and in most other towns and cities. Farmers and tenants are also organized, as are teachers and government employees. Although they do not have a special union, women are well represented in the workforce; they are permitted to work in virtually any field, and they are legally protected against discrimination in employment. The right of all workers to organize unions has been recognized in the constitution promulgated in 1987. Management, for its part, has organized company unions. Relations between trade unions and the employers’ union generally have been untroubled. The Bureau of Labor Relations settles disputes between labour and management through special labour arbiters; the National Labor Relations Commission hears appeals of the arbiters’ decisions.
The government derives its revenue from three major sources: taxation, earnings and other credits, and extraordinary income, including the transfer from special funds (i.e., funds derived primarily from unexpended balances in the budget that are deposited as savings accounts). Revenue is collected principally through the Bureau of Internal Revenue and the Bureau of Customs. Income taxes constitute the single largest portion of government revenue, followed by taxes on domestic goods and services and on international trade. Legislation enacted by the central government since the early 1990s has transferred some powers of taxation to local governments.
Transportation and telecommunications
Hundreds of thousands of miles of roads—a great majority of which are unpaved—link the towns on the archipelago’s many islands. Hard-surfaced roads and highways are largely confined to the Metro Manila region, but paved expressways extend to Laoag in the extreme north, to Sorsogon in the distant south, to Baguio on the western coast, and to Luzon’s more heavily populated southern and western provinces. Thousands of miles of roads of various types have also been constructed on Mindanao, Mindoro, and Palawan and in the Visayas. A major achievement in road construction in the country is the Pan-Philippine Highway (also called the Maharlika Highway), a system of paved roads, bridges, and ferries that connects the islands of Luzon, Samar, Leyte, and Mindanao.
Railways once served both Luzon and Panay; since the late 20th century, however, rail transport has been limited to Luzon. A light-rail system of mass transit has operated in Metro Manila since 1984. Freight and passenger lines run between Caloocan (in northern Metro Manila) and Legaspi on the Bicol Peninsula.
The country’s most important port is Manila. Manila North Harbor handles domestic trade, while Manila South Harbor handles shipping from abroad. Other major ports include Cebu and Iloilo City in the Visayas and Cagayan de Oro, Zamboanga, General Santos, Cotabato (Polloc), and Davao City in Mindanao.
The international airport at Manila, like those at Hong Kong and Singapore, is a focal point for air routes. One terminal is reserved for all flights of the country’s flagship carrier, Philippine Airlines; other terminals are designated for either domestic or international traffic. The country has several other international airports, the most important being Clark International Airport and Subic Bay International Airport (at the former U.S. military bases on Luzon) and the international airport on Mactan Island near Cebu. Numerous other airports handle domestic flights and most have service to and from Manila.
The National Telecommunications Commission oversees all public and private telecommunications enterprises in the Philippines. The government-owned Philippine Long Distance Telephone Company commands the largest share of the telecommunications market; until the end of the 20th century it also had a monopoly on all international calling. Many private telecommunications companies have commenced operations since the mid-1990s, most offering mobile telephone service. While the number of wired standard phone lines has risen only slightly since the turn of the 21st century, the number of cellular phone subscriptions has increased by tens of millions. Since its arrival in the Philippines in the mid-1990s, the Internet has spread relatively slowly, hindered largely by the high cost of access.
Government and society
Constitutional framework
The Philippines has been governed under three constitutions, the first of which was promulgated in 1935, during the period of U.S. administration. It was closely modeled on the U.S. Constitution and included provisions for a bicameral legislative branch, an executive branch headed by a president, and an independent judiciary. During the period of martial law (1972–81) under President Ferdinand E. Marcos, the old constitution was abolished and replaced by a new document (adopted in January 1973) that changed the Philippine government from a U.S.-style presidential system to a parliamentary form. The president became head of state, and executive power was vested in a prime minister and cabinet. President Marcos, however, also served (until 1981) as prime minister and ruled by decree. Subsequent amendments and modifications of that constitution replaced the former bicameral legislature with a unicameral body and gave the president even more powers, including the ability to dissolve the legislature and (from 1981) to appoint a prime minister from among members of the legislature.
After the downfall of Marcos in 1986, a new constitution similar to the 1935 document was drafted and was ratified in a popular referendum held in February 1987. Its key provision was a return to a bicameral legislature, called the Congress of the Philippines, consisting of a House of Representatives (with about 290 members) and a much smaller Senate (some two dozen members). House members are elected from districts, although a number of them are appointed; they can serve no more than three consecutive three-year terms. Senators, elected at large, can serve a maximum of two six-year terms. The first legislative election under the new constitution was held in May 1987. The president, the head of state, can be elected to only a single six-year term and the vice president to two consecutive six-year terms. The president appoints the cabinet, which consists of the heads of the various ministries responsible for running the day-to-day business of the government. Most presidential appointments are subject to the approval of a Commission of Appointments, which consists of equal numbers of senators and representatives.
Local government
Before the arrival of the Spanish in the 16th century, most people lived in small independent villages called barangays, each ruled by a local paramount ruler called a datu. The Spanish later founded many small towns, which they called poblaciones, and from those centres roads or trails were built in four to six directions, like the spokes of a wheel. Along the roadsides arose numerous new villages, designated barrios under the Spanish, that were further subdivided into smaller neighbourhood units called sitios.
Elements of both Spanish and indigenous local settlement structures have persisted into the early 21st century. The country is divided administratively into several dozen provinces, which are grouped into a number of larger regions. The National Capital Region (Metro Manila) has special status, as does the Autonomous Region in Muslim Mindanao in the far south. Each province is headed by an elected governor. The provinces collectively embrace more than 100 cities and some 1,500 municipalities. The poblaciones are now the central business and administrative districts of larger municipalities. Although contemporary rural and urban settlement revolves around the poblaciones, the population is typically concentrated in the surrounding barangays, reinstated during the Marcos regime as the basic units of government (replacing the barrios). The barangays, which number in the tens of thousands, consist of communities of fewer than 1,000 residents that fall within the boundaries of a larger municipality or city. Cities, municipalities, and barangays all have elected officials.
Justice
The constitution of 1987, which reestablished the independence of the judiciary after the Marcos regime, provides for a Supreme Court with a chief justice and 14 associate justices. Supreme Court justices are appointed by the president from a list submitted by the Judicial and Bar Council and serve until they reach the age of 70. Lower courts include the Court of Appeals; regional, metropolitan, and municipal trial courts; and special courts, including the Court of Tax Appeals, Shariʿa (Sharīʿah) district and circuit courts of Islamic law, and the Sandiganbayan, a court for trying cases of corruption. Because justices and judges enjoy fixed tenure and moderate compensation, the judiciary has generally been less criticized than other branches of the government. However, the system remains challenged by lack of fiscal autonomy and an extremely low budget that long has amounted to just a tiny fraction of total government spending.
In order to reduce the load of the lower courts, local committees of citizens called Pacification Committees (Lupon Tagapamayapa) have been organized to effect extrajudicial settlement of minor cases between barangay residents. In each lupon (committee) there is a Conciliation Body (Pangkat Tagapagkasundo), the main function of which is to bring opposing parties together and effect amicable settlement of differences. The committee cannot impose punishment, but otherwise its decisions are binding.
Political process
Partisan political activity was vigorous until 1972, when martial law restrictions under Marcos all but eliminated partisan politics. Where the principal rivals had been the Nacionalista and Liberal parties, Marcos’s New Society Movement (Kilusan Bagong Lipunan; KBL), an organization created from elements of the Nacionalista Party and other supporters, emerged as predominant. Organized political opposition was revived for legislative elections held in 1978, and, since the downfall of Marcos, partisan politics has returned to its pre-1972 level, with a large number of political parties emerging.
The Filipino political scene is marked by parties constantly forming, re-forming, merging, and splintering into factions. Among the most prominent parties in the early decades of the 21st century were the Liberal Party and the Lakas Kampi Christian Muslim Democrats, the latter coming into being after the merger—completed in 2009—between the National Union of Christian Democrats (known as Lakas) and the Alliance of Free Filipinos (known as Kampi). Other parties included the Nacionalista Party, the Nationalist People’s Coalition, and the Force of the Filipino Masses (Pwersa ng Masang Pilipino; PMP). Many smaller parties are splinters from the larger organizations or are associated with particular regional interests. In addition, political victories are often achieved through party coalition, such as the United National Alliance, a coalition between the PMP and the Filipino Democratic Party–Laban that elected boxer Manny Pacquiao to the lower house in 2013.
Certain armed political organizations also operate within the country. The two main ones are the Moro National Liberation Front (MNLF), a Muslim separatist group that officially accepted Mindanao’s status as an autonomous region in the late 20th century but, in so doing, spawned splinter groups that remain committed to achieving a separate Islamic state; and the Moro Islamic Liberation Front (MILF), which split from the MNLF in the late 1970s and more aggressively sought an independent Islamic state for Muslim Filipinos (Moros). In 2012 Pres. Benigno S. Aquino III and the MILF concluded a framework agreement to establish an autonomous Islamic region on the southern island of Mindanao, but breakaway factions within the MILF rejected the deal. Other groups included the Abu Sayyaf Group (ASG), a local fundamentalist Muslim organization that gained notoriety though its kidnap-for-ransom activities and alleged links with international terrorism, and the National Democratic Front (NDF), a communist-led insurgency movement.
The Philippines has universal suffrage for citizens who are at least 18 years old and have lived in the country for at least one year. Suffrage was granted to women in 1937. Since that time women have become prominent leaders at all levels of government, including the presidency.
Security
The Department of National Defense is divided into three services: the army, the navy, and the air force. The army is the largest division. Service in the military is voluntary and is open to both men and women. The commander in chief of the armed forces (the president of the Philippines) is a civilian.
The armed forces are responsible for external defense. However, they also work with the Philippine National Police (PNP) to contain the antigovernment military actions of the NDF, the MILF, the MNLF, and other domestic militant organizations. Both the military and the police participate in international peacekeeping efforts of the United Nations; Philippine forces have been deployed in such a capacity to Afghanistan, East Timor (Timor-Leste), Sudan, and other sites of conflict. The armed forces additionally engage in nonmilitary activities, such as providing disaster relief, constructing roads and bridges, and participating in literacy campaigns.
Under a series of agreements reached in 1947, shortly after Philippine independence, the United States continued to maintain several bases in the Philippines and to provide the Philippines with military equipment and training. Revision of the agreements in 1978 recognized Philippine sovereignty over the bases. All installations subsequently raised the Philippine flag and were placed under Filipino command.
When the revised treaties expired in 1991, the U.S. military presence on the bases ended. However, the two countries remained military allies, carrying out joint military exercises and engaging in mutual military assistance. Following the September 11 terrorist attacks against the United States in 2001, the Philippines joined the U.S.-led global coalition against terrorism. In so doing, the Philippines aimed to upgrade the effectiveness of its armed forces in combating terrorist activity, not only in the international arena but also within its own borders. In 2014 the two countries signed a new 10-year agreement that gave the U.S. military access to several of the bases.
The PNP falls under the supervision of the Department of the Interior and Local Government and is organized into regional and provincial commands. There are also numerous private armies organized by landowners and local politicians. Unsuccessful attempts have been made by various administrations to disband these civilian forces.
Health and welfare
Health and welfare are the responsibilities of the Department of Health (DOH) and the Department of Social Welfare and Development (DSWD). The DOH maintains general, specialized, and research hospitals in urban centres throughout the country. There are also government-operated regional health centres and rural units, as well as private hospitals. Incorporated into the DSWD are several government agencies that address the needs of children, youths, women, families, and people with disabilities. A number of nongovernmental organizations and private social welfare agencies also cooperate with the department.
The rate of mortality in the early 21st century was considerably lower than it had been a few decades earlier in the latter part of the 20th century, particularly among infants, children under the age of five years, and mothers. There was also a generally steady increase in average life expectancy. The improvement in health is credited to better prenatal care and the services of more trained midwives, doctors, and nurses; improved housing, sanitation, and social security benefits; the provision of health services to government employees; the increasing number of medical and nursing school graduates; and the requirement that a medical graduate render rural service. Nonetheless, the demand for health care continues to outstrip available resources; a large number of trained medical professionals emigrate, particularly to the United States, and many of the poorest people still rely on the services of practitioners of traditional medicine and unlicensed midwives.
Housing
There is a serious housing shortage everywhere, although it is especially acute in Manila. In many places, people live in their own dwellings, but the houses are often substandard and lack elementary facilities for health and sanitation. To help meet this problem, the government has relocated thousands of “informal settlers” (i.e., squatters) in Manila to resettlement areas in nearby provinces. Assorted housing plans also have been instituted by various administrations since the Marcos era. Such projects generally consisted of model communities that provided residents with hygienic dwellings, a number of amenities, and facilities for raising livestock and for pursuing cottage industries and other means of making a living. Other important programs have included converting vacant government lands into housing sites for low-income individuals, as well as providing mortgage programs that allow needy families to acquire tracts of land for housing construction and improvement through membership in a specific development community.
Education
The Department of Education ensures that all school-age children and youths receive a basic high-quality education that will allow them to function as productive, socially responsible citizens. Elementary education in the Philippines is compulsory; it starts at age five and lasts for seven years (one year of kindergarten and six years of primary education). Secondary education begins at age 12 and lasts for an additional six years; undergraduate college instruction typically is four years. Vocational schools offer specialized training for one to three years, some in collaboration with the Technical Education and Skills Development Authority, an organization formed through the merger of several government agencies in the mid-1990s. The Bureau of Alternative Learning System offers opportunities to attain a basic education outside of the formal school system.
There are dozens of state-run universities and colleges, a large portion of them in Metro Manila, as well as a number of private institutions. The University of Santo Tomas, the oldest university in the Philippines, was founded in 1611. Other prominent tertiary institutions include the University of the Philippines (1908), which has numerous campuses and is the only national university in the country; the Polytechnic University of the Philippines (1904), another public institution, with its main campus in Manila and numerous affiliated campuses on Luzon; and the Philippine Women’s University (1932), a private institution (coeducational since the late 20th century) that has campuses in Manila, Quezon City, and Davao. Many technical institutions and community colleges serve the provinces.
Pilipino (Filipino) is the medium of instruction in all elementary-school subjects except science, mathematics, and the English language, which are taught in English. The medium of instruction at the secondary and tertiary levels typically is English. A chronic shortage of supplies and facilities was partially remedied by a textbook program begun in the mid-1970s and by the large-scale manufacture of prefabricated classrooms.
