Philippines vs. Indonesia

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. A 21-year rule by 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 that prevented a return to full political stability and economic development. Fidel RAMOS was elected president in 1992. His administration was marked by increased stability and by progress on economic reforms. In 1992, the US closed its last military bases on the islands. Joseph ESTRADA was elected president in 1998. He 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. Her presidency was marred by several corruption allegations but the Philippine economy was one of the few to avoid contraction following the 2008 global financial crisis, expanding each year of her administration. Benigno AQUINO III was elected to a six-year term as president in May 2010 and was succeeded by Rodrigo DUTERTE in May 2016.

The Philippine Government faces threats from several groups, some of which are on the US Government's Foreign Terrorist Organization list. Manila has waged a decades-long struggle against ethnic Moro insurgencies in the southern Philippines, which led to a peace accord with the Moro National Liberation Front and a separate agreement with a break away faction, the Moro Islamic Liberation Front. The decades-long Maoist-inspired New People's Army insurgency also operates through much of the country. In 2017, Philippine armed forces battled an ISIS-Philippines siege in Marawi City, driving DUTERTE to declare martial law in the region. The Philippines faces increased tension with China over disputed territorial and maritime claims in the South China Sea.

astride typhoon belt, usually affected by 15 and struck by five to six cyclonic storms each year; landslides; active volcanoes; destructive earthquakes; tsunamis

volcanism: significant volcanic activity; Taal (311 m), which has shown recent unrest and may erupt in the near future, has been deemed a Decade Volcano by the International Association of Volcanology and Chemistry of the Earth's Interior, worthy of study due to its explosive history and close proximity to human populations; Mayon (2,462 m), the country's most active volcano, erupted in 2009 forcing over 33,000 to be evacuated; other historically active volcanoes include Biliran, Babuyan Claro, Bulusan, Camiguin, Camiguin de Babuyanes, Didicas, Iraya, Jolo, Kanlaon, Makaturing, Musuan, Parker, Pinatubo, and Ragang; see note 2 under "Geography - note"

occasional floods; severe droughts; tsunamis; earthquakes; volcanoes; forest fires

volcanism: Indonesia contains the most volcanoes of any country in the world - some 76 are historically active; significant volcanic activity occurs on Java, Sumatra, the Sunda Islands, Halmahera Island, Sulawesi Island, Sangihe Island, and in the Banda Sea; Merapi (2,968 m), Indonesia's most active volcano and in eruption since 2010, has been deemed a Decade Volcano by the International Association of Volcanology and Chemistry of the Earth's Interior, worthy of study due to its explosive history and close proximity to human populations; on 22 December 2018, a large explosion and flank collapse destroyed most of the 338 m high island of Anak Krakatau (Child of Krakatau) and generated a deadly tsunami inundating portions of western Java and southern Sumatra leaving more than 400 dead; other notable historically active volcanoes include Agung, Awu, Karangetang, Krakatau (Krakatoa), Makian, Raung, Sinabung, and Tambora; see note 2 under "Geography - note"

note 1: for decades, the Philippine archipelago was reported as having 7,107 islands; in 2016, the national mapping authority reported that hundreds of new islands had been discovered and increased the number of islands to 7,641 - though not all of the new islands have been verified; the country is favorably located in relation to many of Southeast Asia's main water bodies: the South China Sea, Philippine Sea, Sulu Sea, Celebes Sea, and Luzon Strait

note 2: Philippines is one of the countries along the Ring of Fire, a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean; up to 90% of the world's earthquakes and some 75% of the world's volcanoes occur within the Ring of Fire

note 3: the Philippines sits astride the Pacific typhoon belt and an average of 9 typhoons make landfall on the islands each year - with about 5 of these being destructive; the country is the most exposed in the world to tropical storms

note 1: according to Indonesia's National Coordinating Agency for Survey and Mapping, the total number of islands in the archipelago is 13,466, of which 922 are permanently inhabited (Indonesia is the world's largest country comprised solely of islands); the country straddles the equator and occupies a strategic location astride or along major sea lanes from the Indian Ocean to the Pacific Ocean

note 2: Indonesia is one of the countries along the Ring of Fire, a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean; up to 90% of the world's earthquakes and some 75% of the world's volcanoes occur within the Ring of Fire; 80% of tsunamis, caused by volcanic or seismic events, occur within the "Pacific Ring of Fire"

note 3: despite having the fourth largest population in the world, Indonesia is the most heavily forested region on earth after the Amazon

The Philippines is an ethnically diverse country that is in the early stages of demographic transition.  Its fertility rate has dropped steadily since the 1950s.  The decline was more rapid after the introduction of a national population program in the 1970s in large part due to the increased use of modern contraceptive methods, but fertility has decreased more slowly in recent years.  The country's total fertility rate (TFR) - the average number of births per woman - dropped below 5 in the 1980s, below 4 in the 1990s, and below 3 in the 2010s.  TFR continues to be above replacement level at 2.9 and even higher among the poor, rural residents, and the less-educated.  Significant reasons for elevated TFR are the desire for more than two children, in part because children are a means of financial assistance and security for parents as they age, particularly among the poor.

The Philippines are the source of one of the world's largest emigrant populations, much of which consists of legal temporary workers known as Overseas Foreign Workers or OFWs.  As of 2019, there were 2.2 million OFWs.  They work in a wide array of fields, most frequently in services (such as caregivers and domestic work), skilled trades, and construction but also in professional fields, including nursing and engineering.  OFWs most often migrate to Middle Eastern countries, but other popular destinations include Hong Kong, China, and Singapore, as well as employment on ships.  Filipino seafarers make up 35-40% of the world's seafarers, as of 2014.   Women OFWs, who work primarily in domestic services and entertainment, have outnumbered men since 1992. 

Migration and remittances have been a feature of Philippine culture for decades.  The government has encouraged and facilitated emigration, regulating recruitment agencies and adopting legislation to protect the rights of migrant workers.  Filipinos began emigrating to the US and Hawaii early in the 20^th century.  In 1934, US legislation limited Filipinos to 50 visas per year except during labor shortages, causing emigration to plummet.  It was not until the 1960s, when the US and other destination countries - Canada, Australia, and New Zealand - loosened their immigration policies, that Filipino emigration expanded and diversified.  The government implemented an overseas employment program in the 1970s, promoting Filipino labor to Gulf countries needing more workers for their oil industries.  Filipino emigration increased rapidly.  The government had intended for international migration to be temporary, but a lack of jobs and poor wages domestically, the ongoing demand for workers in the Gulf countries, and new labor markets in Asia continue to spur Philippine emigration.

Indonesia has the world's fourth-largest population.  It is predominantly Muslim and has the largest Muslim population of any country in the world.  The population is projected to increase to as much as 320 million by 2045.  A government-supported family planning program.  The total fertility rate (TFR) - the average number of births per woman - from 5.6 in the mid-1960s to 2.7 in the mid-1990s.  The success of the program was also due to the social acceptance of family planning, which received backing from influential Muslim leaders and organizations.

The fertility decline slowed in the late 1990's when responsibility for family planning programs shifted to the district level, where the programs were not prioritized.  Since 2012 the national government revitalized the national family planning program, and Indonesia's TFR has slowly decreased to 2.3 in 2020.  The government may reach its goal of achieving replacement level fertility - 2.1 children per woman - but the large number of women of childbearing age ensures significant population growth for many years. 

Indonesia is a source country for labor migrants, a transit country for asylum seekers, and a destination mainly for highly skilled migrant workers.  International labor migration, both legal and illegal, from Indonesia to other parts of Asia (most commonly Malaysia) and the Middle East has taken place for decades because of high unemployment and underemployment, poverty, and low wages domestically.  Increasing numbers of migrant workers are drawn to Australia, Canada, New Zealand, and the US.  The majority of Indonesian labor migration is temporary and consists predominantly of low-skilled workers, mainly women working as domestics.

Indonesia's strategic location between Asia and Australia and between the Pacific and Indian Oceans - and its relatively easy accessibility via boat - appeal to asylum seekers.  It is also an attractive transit location because of its easy entry requirements and the ability to continue on to Australia.  Recent asylum seekers have come from Afghanistan, Burma (Rohingyas), Iraq, Somalia, and Sri Lanka.  Since 2013, when Australia tightening its immigration policy, thousands of migrants and asylum seekers have been stranded in Indonesia, where they live in precarious conditions and receive only limited support from international organizations.  The situation for refugees in Indonesia has also worsened because Australia and the US, which had resettled the majority of refugees in Indonesia, have significantly lowered their intake.

81 provinces and 38 chartered cities

provinces: Abra, Agusan del Norte, Agusan del Sur, Aklan, Albay, Antique, Apayao, Aurora, Basilan, Bataan, Batanes, Batangas, Biliran, Benguet, Bohol, Bukidnon, Bulacan, Cagayan, Camarines Norte, Camarines Sur, Camiguin, Capiz, Catanduanes, Cavite, Cebu, Cotabato, Davao del Norte, Davao del Sur, Davao de Oro, Davao Occidental, Davao Oriental, Dinagat Islands, Eastern Samar, Guimaras, Ifugao, Ilocos Norte, Ilocos Sur, Iloilo, Isabela, Kalinga, Laguna, Lanao del Norte, Lanao del Sur, La Union, Leyte, Maguindanao, Marinduque, Masbate, Mindoro Occidental, Mindoro Oriental, Misamis Occidental, Misamis Oriental, Mountain, Negros Occidental, Negros Oriental, Northern Samar, Nueva Ecija, Nueva Vizcaya, Palawan, Pampanga, Pangasinan, Quezon, Quirino, Rizal, Romblon, Samar, Sarangani, Siquijor, Sorsogon, South Cotabato, Southern Leyte, Sultan Kudarat, Sulu, Surigao del Norte, Surigao del Sur, Tarlac, Tawi-Tawi, Zambales, Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay;

chartered cities: Angeles, Bacolod, Baguio, Butuan, Cagayan de Oro, Caloocan, Cebu, Cotabato, Dagupan, Davao, General Santos, Iligan, Iloilo, Lapu-Lapu, Las Pinas, Lucena, Makati, Malabon, Mandaluyong, Mandaue, Manila, Marikina, Muntinlupa, Naga, Navotas, Olongapo, Ormoc, Paranaque, Pasay, Pasig, Puerto Princesa, Quezon, San Juan, Santiago, Tacloban, Taguig, Valenzuela, Zamboanga

Ambassador Sung Y. KIM (since 21 October 2020)

The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from about 10 million overseas Filipino workers and migrants, and a rapidly expanding services industry. During 2017, the current account balance fell into the negative range, the first time since the 2008 global financial crisis, in part due to an ambitious new infrastructure spending program announced this year. However, international reserves remain at comfortable levels and the banking system is stable.

Efforts to improve tax administration and expenditures management have helped ease the Philippines' debt burden and tight fiscal situation. The Philippines received investment-grade credit ratings on its sovereign debt under the former AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining high and inclusive growth over the longer term.

Economic growth has accelerated, averaging over 6% per year from 2011 to 2017, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. Although 2017 saw a new record year for net foreign direct investment inflows, FDI to the Philippines has continued to lag regional peers, in part because the Philippine constitution and other laws limit foreign investment and restrict foreign ownership in important activities/sectors - such as land ownership and public utilities.

Although the economy grew at a rapid pace under the AQUINO government, challenges to achieving more inclusive growth remain. Wealth is concentrated in the hands of the rich. The unemployment rate declined from 7.3% to 5.7% between 2010 and 2017; while there has been some improvement, underemployment remains high at around 17% to 18% of the employed population. At least 40% of the employed work in the informal sector. Poverty afflicts more than a fifth of the total population but is as high as 75% in some areas of the southern Philippines. More than 60% of the poor reside in rural areas, where the incidence of poverty (about 30%) is more severe - a challenge to raising rural farm and non-farm incomes. Continued efforts are needed to improve governance, the judicial system, the regulatory environment, the infrastructure, and the overall ease of doing business.

2016 saw the election of President Rodrigo DUTERTE, who has pledged to make inclusive growth and poverty reduction his top priority. DUTERTE believes that illegal drug use, crime and corruption are key barriers to economic development. The administration wants to reduce the poverty rate to 17% and graduate the economy to upper-middle income status by the end of President DUTERTE's term in 2022. Key themes under the government's Ten-Point Socioeconomic Agenda include continuity of macroeconomic policy, tax reform, higher investments in infrastructure and human capital development, and improving competitiveness and the overall ease of doing business. The administration sees infrastructure shortcomings as a key barrier to sustained economic growth and has pledged to spend $165 billion on infrastructure by 2022. Although the final outcome has yet to be seen, the current administration is shepherding legislation for a comprehensive tax reform program to raise revenues for its ambitious infrastructure spending plan and to promote a more equitable and efficient tax system. However, the need to finance rehabilitation and reconstruction efforts in the southern region of Mindanao following the 2017 Marawi City siege may compete with other spending on infrastructure.

Indonesia, the largest economy in Southeast Asia, has seen a slowdown in growth since 2012, mostly due to the end of the commodities export boom. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth. Indonesia's annual budget deficit is capped at 3% of GDP, and the Government of Indonesia lowered its debt-to-GDP ratio from a peak of 100% shortly after the Asian financial crisis in 1999 to 34% today. In May 2017 Standard & Poor's became the last major ratings agency to upgrade Indonesia's sovereign credit rating to investment grade.

Poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among its regions are still part of Indonesia's economic landscape. President Joko WIDODO - elected in July 2014 - seeks to develop Indonesia's maritime resources and pursue other infrastructure development, including significantly increasing its electrical power generation capacity. Fuel subsidies were significantly reduced in early 2015, a move which has helped the government redirect its spending to development priorities. Indonesia, with the nine other ASEAN members, will continue to move towards participation in the ASEAN Economic Community, though full implementation of economic integration has not yet materialized.

high unemployment and rural population impede investment in fixed infrastructure; dominance in the mobile segment and rapid development of mobile broadband; investment focused on fiber infrastructure in urban areas with 4G available in most areas; national broadband plan to improve connectivity in rural areas underway; data center and smart city pilot in Manila; submarine cable link and satellite improves telecom for the region; major exporter of integrated circuits to China, and importer of circuits and broadcasting equipment from China (2021)

with large population, disbursed island geography, and slow economic growth, Indonesia's telecom sector is based on 3G/LTE mobile infrastructure and inadequate fixed-line capacity; market is attracting foreign investment, especially in data center and cloud based services; tests of 5G challenged by lack of spectrum; satellite improvements in 2020 (2021)

the International Maritime Bureau reports the territorial waters of littoral states and offshore waters in the South China Sea as high risk for piracy and armed robbery against ships; an emerging threat area lies in the Celebes and Sulu Seas between the Philippines and Malaysia where three ships were attacked in 2020; numerous commercial vessels have been attacked and hijacked both at anchor and while underway; hijacked vessels are often disguised and cargoes stolen

Philippines claims sovereignty over Scarborough Reef (also claimed by China together with Taiwan) and over certain of the Spratly Islands, known locally as the Kalayaan (Freedom) Islands, also claimed by China, Malaysia, Taiwan, and Vietnam; the 2002 "Declaration on the Conduct of Parties in the South China Sea," has eased tensions in the Spratly Islands but falls short of a legally binding "code of conduct" desired by several of the disputants; in March 2005, the national oil companies of China, the Philippines, and Vietnam signed a joint accord to conduct marine seismic activities in the Spratly Islands; Philippines retains a dormant claim to Malaysia's Sabah State in northern Borneo based on the Sultanate of Sulu's granting the Philippines Government power of attorney to pursue a sovereignty claim on his behalf; maritime delimitation negotiations continue with Palau

Indonesia has a stated foreign policy objective of establishing stable fixed land and maritime boundaries with all of its neighbors; three stretches of land borders with Timor-Leste have yet to be delimited, two of which are in the Oecussi exclave area, and no maritime or Exclusive Economic Zone (EEZ) boundaries have been established between the countries; all borders between Indonesia and Australia have been agreed upon bilaterally, but a 1997 treaty that would settle the last of their maritime and EEZ boundary has yet to be ratified by Indonesia's legislature; Indonesian groups challenge Australia's claim to Ashmore Reef; Australia has closed parts of the Ashmore and Cartier Reserve to Indonesian traditional fishing and placed restrictions on certain catches; land and maritime negotiations with Malaysia are ongoing, and disputed areas include the controversial Tanjung Datu and Camar Wulan border area in Borneo and the maritime boundary in the Ambalat oil block in the Celebes Sea; Indonesia and Singapore continue to work on finalizing their 1973 maritime boundary agreement by defining unresolved areas north of Indonesia's Batam Island; Indonesian secessionists, squatters, and illegal migrants create repatriation problems for Papua New Guinea; maritime delimitation talks continue with Palau; EEZ negotiations with Vietnam are ongoing, and the two countries in Fall 2011 agreed to work together to reduce illegal fishing along their maritime boundary