PHILIPPINE – USAFOREIGN

RELATIONS

The Philippines’ relationship with the United States has been robust, dynamic and strategic. This relationship is nurtured by a shared history and adherence to common values, especially a commitment to freedom, democracy and a market economy. From combating war against terrorism to war against poverty, the partnership between the Philippines and the US is broad-based, opening fresh avenues for greater cooperation.

The Origin of an Enduring Alliance

In 1898 America’s Manifest Destiny and the Filipinos’ aspirations for freedom—we had by then proclaimed our independence from Spain— clashed and collided in a bloody guerrilla war ending with the capture of our President Aguinaldo and the demise of Asia’s first Republic.

Over time, the bitterness of defeat—and the triumphalism of empire—gave way to grudging collaboration, then evolving into mutual trust and respect.

Filipinos won America’s admiration for their patriotism, love of country, and their steadfast and unwavering resolve to be free. And the United States committed itself to ever-greater measures of self-government for its Pacific empire.

Eventually in 1935, we achieved home rule through a Commonwealth — and the pledge within a decade of full independence.

The outbreak of the Second World War strengthened even more the ties that joined the Philippines and the United States. The Filipinos stood as one, shoulder to shoulder with America and its allies in the war against aggression.

For both our peoples, Filipinos and Americans, freedom and democracy are not just abstract ideas or principles. They are real, day-to-day values we are willing to defend—values for which we are willing to pay the ultimate price.

And that price we paid – then, in the 1940’s from the foxholes of Bataan and the tunnels of Corregidor to the barbarous death march to Capas and Camp O’Donnell; and now, against extremism, poverty and terrorism.

At war’s end, in 1946, the Philippines attained its hard— earned independence. And, with the signing of the 1951 Mutual Defense Treaty, the Philippines became the United States’ first treaty ally in Asia.

Highlights of the Philippine US

Bilateral Relations

A. Defense and Security Engagement

The Philippines and the United States entered into a Mutual Defense Treaty in 1951. The Philippines is one of only two US treaty allies in Southeast Asia (the other one being Thailand).

For FY2012, the US has allocated a total of US $ 158.8 million in defense and development assistance for the Philippines. The package includes:

• US $ 30 million in Foreign Military Financing (FMF)• US $ 81.05 million in Development Assistance (DA)• US $ 33.8 million in Global Health Programs• US $ 1.8 million in International Military Education

and Training (IMET)• US $2.45 million in International Narcotics Control

and Law Enforcement (INCLE)• US$9.52 million in NonProliferation, AntiTerrorism,

Demining and Related Programs (NADR)

Defense and security cooperation is coordinated through the framework of the Mutual Defense Board and the Security Engagement Board. The Mutual Defense Board provides continuing inter-governmental machinery for direct liaison and consultation on military matters of mutual concern to develop and to improve both countries’ common defense. The Security Engagement Board on the other hand, provides the framework and mechanism for continuing liaison and consultation on non-traditional threats to security such as terrorism, transnational crimes, maritime security, and natural and man-made disasters.

B. Legislative AffairsAmbassador Jose L. Cuisia, Jr. has further

intensified the Embassy’s engagement with the United States Congress since assuming his post as Ambassador on April 4, 2011. Ambassador Cuisia has met with Congressional leaders, Senators, and Representatives to highlight the importance of Philippines-United States Alliance in pursuing mutual goals of economic growth, democratic governance, and regional security.

The relationship between the Philippines and the United States Congress are steeped in history. From 1907, during the American occupation, the Philippines had been

represented in the United States Congress by Philippine resident commissioners until the U.S. granted Philippine independence in 1946. The commissioners were chosen by the Philippine Legislature and the National Assembly, and they represented the Philippines as one congressional district.

Today, Philippine relations with the United States Congress continue to be actively promoted in view of the sustained and enduring close linkages between the two countries as well as the presence of some 3.5 million Americans of Filipino descent in the United States. Filipino Americans represent the second biggest Asian minority, and a good number of them have an active presence in practically all states and congressional districts.

Bills in the US Congress of interest to the Philippines are generally related to trade, economic and security relations, US assistance to the Philippines, and those that promote the interest of the Filipino population and the Filipino American community.

Filipino Veterans of World War II

The most important piece of legislation in the US Congress that had been the focus of Philippine advocacy for many years was the Filipino Veterans Equity Act. In February 2009,

President Barack Obama signed into law a provision recognizing the military service of Filipino veterans in World War II and providing them with lump sum benefits.

US Assistance to the Philippines and Defense Cooperation

The US Congress had allocated US$2 billion for the Philippines from 1999 to 2011. US assistance contributes to: building peace in Mindanao, strengthening democratic institutions in the country, enhancing economic growth, and reinforcing greater stability in the region.  The supplementary foreign military financing approved yearly by the U.S. Congress remains a very important component of the Philippine government’s effort to develop the country’s external defense capabilities.

Save Our Industries Act

To expand textiles and apparel trade between the Philippines and the U.S., the SAVE Act is an innovative win-win trade legislation that will sustain jobs and increase exports in both the United States and the Philippines. H.R. 2387, was introduced by Representatives Jim McDermott (D-WA), along with Brian Bilbray (R-CA) and Bob Filner (D-CA) co-chairs of the Philippine Friendship Caucus. The Senate companion, S. 1244, was introduced by Senators Daniel Inouye (D-HI) and Roy Blunt (R-MO) on June 22, 2011.

Friends in the US Congress

During the term of Secretary Albert del Rosario as

Philippine Ambassador to the U.S., the Philippines-US Friendship Caucus was officially launched in Washington, D.C. in 2003 with 52 bipartisan Members of the US House of Representatives.

The eight founding pillars of the Caucus are

Representatives Darrell Issa (R-CA), Bob Filner (D-CA), Duke Cunningham (R-CA), Bobby Scott (D-VA), Todd Tiahrt (R-CA), Neil Abercrombie (D-HI), Dana Rohrabacher (R-CA) and Lane Evans (D-IL).

C. Economic AffairsBilateral Trade and Investment

Bilateral trade and investment cooperation continues to serve as a dynamic dimension of the Philippines-US partnership.

Both countries meet regularly under the auspices of a Trade and Investment Framework Agreement (TIFA) that was signed in November 1989. Under the TIFA, a Memorandum of Understanding (MOU) to Cooperate on Stopping Illegal Transhipments of Textiles and Apparel was signed by the Philippines and the United States

in 2006. A Memorandum of Understanding (MOU) Regarding the Implementation of Minimum Access Commitments by the Philippines was signed in 1998.

Currently, the U.S. is the Philippines’ number one

source of Foreign Direct Investments (FDIs). In January 2012 alone, FDIs from the U.S. rose significantly to $497.61 million (compared to $19.45 million in January last year).

In fact, January 2012’s performance is higher than the total for the past two years of $454.11 million ($229.19 million in 2010 and $224.92 million in 2011). As of December 2011, net FDIs from the US amounted to $224.92 million.

In 2011, the Philippines was the 33 largest U.S. trading partner; and the US was the Philippines’ second largest trading partner (after Japan), with total two-way trade valued at $13.6 billion or 16.2% of the Philippines’ total trade with the world.

The US also maintained its top 2 position in January 2012 with total trade at $1.1 billion. Since 2006, the trade balance has been in favor of the Philippines.

Philippine exports to the US valued at $7.1 billion in 2011 mainly comprise of components/semiconductor devices, garments, coconut oil, electronic equipment and parts, electronic data processing, other manufactures, sugar, processed food and beverages, and machinery and transport, among others.

In terms of imports, the Philippines sources from the US materials and accessories for the manufacture of electronic equipment, telecommunication equipment and electrical machinery, wheat, power generating and specialized machines, feedstuff for animals and other food and live animals, among others.

According to the DTI Philippine Trade and Investment Center (PTIC)-Washington, D.C. (as of May 2011), 75-80% of the Philippines’ total exports to the U.S. is either Most Favored Nation (MFN) zero or GSP-eligible, i.e., also zero tariff. Conversely, roughly 20-25% remain dutiable.

Of this, 20-25% of PH exports to the US are still subject to duty and apparel accounts for 75-82% (which could be secured once the SAVE Act is passed in the 112th U.S. Congress).

Partnership for Growth (PFG)

The Philippines’ overarching goal of achieving broad-based economic growth is supported by a new strategic development initiative of the US Government called the Partnership for Growth (PFG). The PFG’s three (3)

focus areas are: improving regulatory quality;

strengthening the rule of law and anti-corruption measures; and improving fiscal performance.

The PFG Statement of Principles was signed in Manila

last November 2011 between U.S. State Secretary Clinton and Philippine Foreign Affairs Secretary del Rosario.

On 05 May 2012, USAID and DOF signed a

USAID-GPH bilateral agreement amendment which made available $29.4 million to start the major PFG programs. The amendment also provides information to the GPH regarding USAID’s planned funding for the duration of the agreement, subject to availability of funds, in the amount of $140 million. USAID and counterpart agencies are fleshing out the major programs identified under the Joint Country Action Plan (JCAP).

Tourism

For 2011, total arrivals from the US is estimated at 630,170 American tourists, representing a 5% increase from the 2010 level; with receipts amounting to US$591.1 million, which represent the same percentage increase from 2010. The Department of Tourism (DOT) projects a 3.5% increase in tourist arrivals (652,230) for 2012; representing US$611.79 million in revenues, or a 3.5% increase over 2011 level.

D. Socio-Cultural AffairsEducation

Cooperation in education is also a cornerstone of Philippine-U.S. relations. The public education system in the Philippines is one of the legacies of American occupation in the Philippines. Professional and student exchanges between the Philippines and the United States have expanded over time. The Fulbright Program in the Philippines, established in 1948, is the world’s oldest continuous Fulbright program.

Filipino Americans in elected office

Filipino Americans also occupy elected office such as Representative Steve Austria in the US Congress, Delegate Ron Villanueva of the Virginia General Assembly, Delegate Kris Valderrama in the Maryland House of Delegates and Filipino Americans in other states who serve in local governments and in the judiciary.

Filipino Associations

There are at least 3,000 Filipino and Filipino-American organizations in the United States according to the National Federation of Filipino American Associations (NaFFAA). The various organizations may be classified as socio-civic, cultural, alumni, professional, regional/provincial, religious, among others. Most of these organizations undertake projects that aim to extend assistance to various causes in the Philippines.

U.S. Assistance to PhilippinesThe U.S. Government’s goal in the Philippines is to help the

country become a stable and prosperous nation. The 2011 Partnership for Growth Statement of Principles reinforced a shared interest in promoting inclusive and sustainable economic growth in the Philippines. U.S. assistance to the Philippines fosters broad-based economic growth; improves the health and education of Filipinos; promotes peace and security; advances democratic values, good governance, and human rights; and strengthens regional and global partnerships. Department of State, Department of Defense, and the U.S. Agency for International Development (USAID) programs in conflict-affected areas of Mindanao aim to strengthen the foundation for peace and stability in the area. U.S. assistance, including from the Millennium Challenge Corporation, seeks to intensify cooperation through a whole-of-government approach, using a wide range of assistance and other foreign policy tools. The United States has had a Peace Corps program in the Philippines for over 50 years.

Bilateral Economic Relations

The United States is among the Philippines’ top trading partners, and it traditionally has been the Philippines' largest foreign investor. The Philippines has been among the largest beneficiaries of the Generalized System of Preferences program for developing countries, which provides preferential duty-free access to the U.S. market. Key exports to the United States are semiconductor devices and computer peripherals, automobile parts, electric machinery, textiles and garments, wheat and animal feeds, coconut oil and information technology/business process outsourcing services.

In addition to other goods, the Philippines imports raw and semi-processed materials for the manufacture of semiconductors, electronics and electrical machinery, transport equipment, and cereals and cereal preparations. The two countries have a bilateral trade and investment framework agreement and a tax treaty.

Philippines's Membership in International Organizations

Philippines and the United States belong to a number of the same international organizations, including the United Nations, ASEAN Regional Forum, Asia-Pacific Economic Cooperation forum, International Monetary Fund, World Bank, and World Trade Organization. Philippines also is an observer to the Organization of American States.

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