Republic of the Philippines

D

Libraries and Museums

In addition to the university libraries, the major libraries of the country are the Manila City Library, the National Library, and the library of the Science and Technology Information Institute, all in Manila. The Lopez Memorial Museum and Library, in Pasay, has collections of paintings by major Filipino artists, as well as the letters and manuscripts of José Rizal. The Santo Tomás Museum, in Manila, has major archaeological and natural-history collections, illustrating the history of the islands. The National Museum, in Manila, has divisions of anthropology, botany, geology, and zoology, along with art collections and a planetarium.

V

Economy

Before World War II (1939-1945) the economy of the Philippines was based on the production and export of a narrow range of primary commodities, mainly agricultural and forest products. The Supreme Court of the United States ruled in the early 20th century that Philippine goods could enter the American market without tariff restraints. In the trade that followed, the United States imported Philippine agricultural goods and provided the Philippines with most manufactured items. The Philippines had virtually no manufacturing other than the processing of food products, primarily for the United States market.

After independence in 1946, the Philippines initially remained dependent on free-trade access to United States markets for its agricultural commodities, especially sugar. Government restrictions on import spending spurred an increase in manufacturing for the domestic market. During the 1950s the Philippines tried to become an industrialized nation. In the long term, however, protectionist economic policies provided little incentive for the development of labor-intensive export manufacturing. In the 1970s the government implemented a policy to encourage export manufactures and foreign investment, and the rate of economic growth accelerated. The country’s foreign debt rose dramatically, however, and by the mid-1970s the country faced problems meeting payments on its international loans. This problem was compounded by a worldwide recession in the early 1980s. The recession resulted in less demand for Philippine manufactures, and the economy moved into a deep recession in the mid-1980s.

At this time the Philippine economy also suffered from more than a decade of economic mismanagement under President Ferdinand Marcos, who ruled by decree after declaring martial law in 1972. Under Marcos the government greatly expanded the number of public-sector enterprises. Government-mandated monopolies were set up in various sectors, while subsidies and special privileges were awarded to close associates of Marcos. This concentration of ownership and control among the president’s closest business associates, friends, and relatives became known as crony capitalism. The system allowed for rampant corruption. During the economic recession of the 1980s, many of the crony enterprises experienced severe financial difficulties. This in turn undermined the viability of the big government-owned banks and led to an economic crisis.

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Major structural reforms implemented during succeeding government administrations dismantled the monopolies and promoted privatization. Measures to stabilize the economy involved compliance with a severe austerity program of the International Monetary Fund (IMF). Economic reforms reduced government intervention in the economy and stimulated the private sector. By the mid-1990s the Philippine economy had largely recovered and was experiencing steady growth. It contracted much less dramatically than other Asian countries from the regional financial crisis of 1997. It was also slower to rebound, however, due to drought conditions that caused a sharp fall in agricultural output in 1998. The modest pace of economic recovery was adversely affected by corruption in government and a global economic downturn in the early 2000s that reduced demand for Philippine manufactures by the country’s two largest trading partners, the United States and Japan.

In the early 2000s the government was pursuing economic reforms to help the Philippines match the pace of development in the so-called newly industrialized economies of East Asia. The strategy includes improving infrastructure, revamping the tax system to increase government revenues, promoting further deregulation and privatization of the economy, and expanding trade ties in the region.

The estimated governmental budget in 2007 included revenues of $22.7 billion and expenditures of $24.8 billion. Gross domestic product (GDP) in 2007 was $144.1 billion, or $1,639.10 per person.

A

Labor

In 2007 the labor force of the Philippines numbered 36.9 million people. Agriculture, forestry, and fishing employed 37 percent of the labor force; manufacturing, construction, and mining, 15 percent; and services, 48 percent. The unemployment rate was 6.3 percent in 2007.

Employment opportunities associated with the modern economy, mostly services and manufacturing, are concentrated in a few urban centers, especially the Manila metropolitan area. The country’s high rate of population growth results in large additions to the labor force each year in an economy with a high rate of unemployment and even higher underemployment. The shortage of employment opportunities has resulted in large-scale migrations of Filipino workers, both sophisticated professionals and unskilled workers, to countries such as the United States and Malaysia. Approximately 6 million Filipinos work abroad. Many of them send a portion of their earnings to relatives in the Philippines, infusing the economy with a significant source of foreign exchange. The migration of vitally needed professionals has created a serious “brain drain” in the Philippines.

The Trade Union Congress of the Philippines (TUCP) is the largest union body in the Philippines, with about 1.5 million members and 39 affiliated labor and trade unions. In the late 1990s the Philippines had more than 8,000 trade unions with a total membership of 3.6 million.

B

Agriculture, Forestry, and Fishing

In 2007 agriculture, forestry, and fishing contributed 14 percent of the GDP. About 19 percent of the total land area of the Philippines is arable, or suitable for cultivation. The most important subsistence crops are rice, corn, cassava, and sweet potatoes. Rice paddies and cornfields occupy about half of the arable land of the Philippines. Coconuts are one of the most important cash crops, and the Philippines is one of the world’s leading exporters of coconut products, including coconut oil and copra (dried coconut). Bananas and pineapples are also important commercial crops, both of which are grown on large plantations owned by multinational companies. Other crops include sugarcane, abaca (Manila hemp), coffee, tobacco, and mangoes. Livestock on farms include carabao (water buffalo), cattle, chickens, goats, horses, and hogs. Many farmers are tenants, who rent the land and pay the landowner a share of the crop. Other farmworkers include seasonal migrant laborers.

Sugar was the most important agricultural export of the Philippines from the mid-1800s to the mid-1970s. Much of the modernization of the country took place to facilitate the processing and transport of this export crop. For many years, the Philippines had access to a protected and subsidized U.S. market for its sugar. The decline of the sugar industry involved many factors, including the expiration of a U.S. quota system on sugar imports in 1974 followed by a sharp decline in world sugar prices.

Hardwood trees such as mahogany were once one of the country’s most valuable resources, but now this resource is severely depleted. The government banned the export of unprocessed hardwood logs in 1986 in an effort to stimulate domestic processing of raw lumber into finished products. Initially this policy was successful, and products such as wood veneer became important exports. However, illegal logging and unsuccessful reforestation programs depleted the hardwood forests, and output from lumber-processing industries declined. Other forestry industries remain viable because their products are based on more easily renewable sources than hardwood, such as bamboo, rattan, and the ceiba (kapok) tree. Bamboo and rattan are used in making furniture, baskets, floor mats, and other household goods. The ceiba tree, also known as the silk-cotton tree, is cultivated and harvested for its fiber, which is used in the manufacture of finished goods such as insulation and upholstery.

Fishing is an important industry in the Philippines. The average annual fish catch exceeds 2 million metric tons. Nearly half of the total catch is made by municipal and subsistence fishers who operate small boats in shallow coastal waters. The surrounding and inland seas of the Philippines yield crab, sardines, anchovies, tuna, scad, and mackerel. Shrimp, milkfish, and tilapia are raised in artificially created fishponds, in the fish-farming industry known as aquaculture. Much of the total catch is for domestic consumption, and about half of the protein in the Philippine diet comes from fish and other seafood. Shrimp and prawn exports to Japan are a significant source of foreign exchange. The pollution of coastal and inland waters and depletion of fish populations through overfishing have reduced the fishing sector’s productivity in some areas of the Philippines.

C

Mining

The Philippines has extensive deposits of valuable metallic and mineral ores, including copper, gold, silver, chromium, lead, and nickel. Copper is the country’s leading mineral product. In 2004 the Philippines produced 6,000 metric tons of copper. The mining industry grew rapidly in the 1970s in response to government initiatives. In the mid-1980s, however, output in the metallic sector entered an overall decline as world prices for metals weakened. The nonmetallic sector, meanwhile, was stimulated by a rising domestic demand for coal. The country’s plentiful coal deposits were explored as an alternative to costly petroleum imports, and the mining of coal increased substantially after 1979. In 2003 the Philippines produced 2.03 million metric tons of coal.

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