In 1944-45, US and Filipino forces formed a united front to regain control of the region from Japanese rule and on July 4, 1946 the Republic of the Philippines attained national independence. Still, in the past half century the Philippines has been faced with years of mostly non-violent political volatility. Its economy saw a sharp rise and steady decline, though with some improvement in the past few years. The country continues to rely heavily on financial contributions from its unique overseas workforce.
The 20-year rule of President Ferdinand Marcos ended in 1986, when a ‘people power’ movement ousted the long-standing ruler and forced him into exile. His opponent, Corazon Aquinto, was subsequently made president. Several coup attempts troubled her presidency and hindered the country’s political stability and economic development. After Fidel Ramos was elected president in 1992, the US closed its last military bases on the islands, as his administration was marked by greater stability and economic progress. However, another ‘people power’ movement ousted the following leader, Joseph Estrada, after the breakdown of his impeachment trial on corruption charges in 2001. Gloria Macapagal-Arroyo has led the nation since.
Economic growth has averaged 5% annually since Macapagal-Arroyo took office. The president has also averted a fiscal crisis by pushing for new revenue measures and, until recently, tightening expenditures during the 2008-2009 global economic down turn.
However, the Philippines must maintain this momentum in order to catch up with regional competitors, improve employment opportunities, and alleviate poverty, given its high population growth and unequal distribution of income. Although the Philippine economy grew at its fastest pace in three decades in 2007 with real GDP growth exceeding 7%, its growth had slowed to 3.8% in 2008 as a result of the world financial crisis.
High government spending, a flexible service sector, and large financial contributions from the four-to-five-million Filipinos who work abroad further functioned to cushion the economy in recent times. This presence of millions of Filipino contract workers is considered to be a pillar of Philippine foreign policy. Foreign exchange remittances from these workers exceed 11% of the country’s GDP. The service sector contributes more than half of overall Philippine economic output.
The Philippines has one of the highest literacy rates in the developing world, at approximately 93% of the population 10 years of age and older. It is a member of the Association of Southeast Asian Nations (ASEAN), the ASEAN Regional Forum (ARF), and the Asia-Pacific Economic Cooperation (APEC) forum. The Philippines is also a member and active participant of the United Nations and presently has peacekeepers deployed in eight UN Peacekeeping Operations worldwide.
Decades of Muslim insurgency in the southern Philippines have led to a peace accord with one group and intermittent peace talks with another.