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Philippines
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The Philippine Islands became a Spanish colony during
the 16th century; they were ceded to the US in 1898 following
the Spanish-American War. In 1935 the Philippines became
a self-governing commonwealth. Manuel QUEZON was elected
president and was tasked with preparing the country for
independence after a 10-year transition. In 1942 the islands
fell under Japanese occupation during World War II, and
US forces and Filipinos fought together during 1944-45
to regain control. On 4 July 1946 the Republic of the
Philippines attained its independence. The 20-year rule
of Ferdinand MARCOS ended in 1986, when a "people
power" movement in Manila ("EDSA 1") forced
him into exile and installed Corazon AQUINO as president.
Her presidency was hampered by several coup attempts,
which prevented a return to full political stability and
economic development. Fidel RAMOS was elected president
in 1992 and his administration was marked by greater stability
and progress on economic reforms. In 1992, the US closed
its last military bases on the islands. Joseph ESTRADA
was elected president in 1998, but was succeeded by his
vice-president, Gloria MACAPAGAL-ARROYO, in January 2001
after ESTRADA's stormy impeachment trial on corruption
charges broke down and another "people power"
movement ("EDSA 2") demanded his resignation.
MACAPAGAL-ARROYO was elected to a six-year term as president
in May 2004. The Philippine Government faces threats from
three terrorist groups on the US Government's Foreign
Terrorist Organization list, but in 2006 and 2007 scored
some major successes in capturing or killing key wanted
terrorists. Decades of Muslim insurgency in the southern
Philippines have led to a peace accord with one group
and on-again/off-again peace talks with another.
Economic growth has averaged 5% since President MACAPAGAL-ARROYO
took office in 2001. MACAPAGAL-ARROYO averted a fiscal
crisis by pushing for new revenue measures and, until
recently, tightening expenditures. Declining fiscal deficits,
tapering debt and debt service ratios, and increased spending
on infrastructure and social services bolstered optimism
over Philippine economic prospects. Although the general
macroeconomic outlook improved significantly in recent
years, the economy still faces several long term challenges.
The Philippines must maintain the reform momentum in order
to catch up with regional competitors, improve employment
opportunities, and alleviate poverty. The Philippines
will need still higher, sustained growth to make progress
in alleviating poverty, given its high population growth
and unequal distribution of income. The Philippine economy
grew at its fastest pace in three decades in 2007 with
real GDP growth exceeding 7%, but growth slowed to 4.5%
in 2008 as a result of the world financial crisis. High
government spending, a relatively small trade sector,
a resilient service sector, and large remittances from
the four- to five-million Filipinos who work abroad have
helped cushion the economy from the current financial
crisis.
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