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PH-US Bilateral Relations

Overview of Philippines – United States of America Bilateral Relations

I. Establishment of Diplomatic Relations

The Philippines and the United States have an enduring alliance that is based on deep historical and cultural ties. The Philippines gained its independence from the United States on July 4, 1946, and diplomatic relations were formally established the same day.

II. Highlights of the Philippines-United States Bilateral 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 official visit of President Benigno S. Aquino III to Washington, D.C., capped by his meeting with President Barack Obama at the White House on June 8 further strengthened Philippine-U.S. 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:

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 Affairs

Ambassador 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.

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 Affairs

Bilateral 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.

In 2013, the U.S. ranked 2nd as the Philippines’ source of Foreign Direct Investments (FDIs) with approved FDI amounting to $1.3 billion which demonstrated an increase of 28% from 2012 data.

In 2013, the Philippines was the 36th largest U.S. trading partner; and the US was the Philippines’ second largest trading partner (after Japan), with total two-way trade valued at $15.3 billion or 12.9% 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 $8.3 billion in 2013 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 July 2013), 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%.

Agriculture

 

The Philippines is the 10th largest agricultural export market of the United States while the United States remains to be the top single-country of destination for Philippine agriculture, fisheries, and food products.

In US fiscal year 2013, US farm and food exports to the Philippines reached $2.5 billion while the Philippines exported about $1.3 billion worth of agricultural goods.

According to USDA data, the Philippines is the 2nd largest market for US soybean meal ($589 million) 4th for dairy products ($345 million), 6th for wheat ($569 million) and 8th largest for pork and pork products ($116 million).

As a source, the Philippines remains to be the largest supplier of coconut oil ($454 million) and desiccated (dried) coconut($55 million) to the United States, the 8th largest source of processed fruit and vegetables ($197 million); fruit and vegetable juices ($62 million), and sugar ($23 million)  and11th largest supplier of seafood ($264 million).

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Recognizing the agriculture sector's increasing importance to the bilateral relationship, the United States and the Philippines are working on measures to further strengthen and enhance bilateral agricultural trade including for U.S. meat and vegetable exports to Philippines as well as Philippine fruit exports to the United States.

There are also many opportunities for collaboration in agricultural and fishery research, science and technology.

The Philippines is also a priority country of the United States' global biodiversity conservation policy.

 

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 Affairs

People to people ties remain the strongest ties that bind the Philippines and the US.

At the opening of the bilateral meeting between President Aquino and President Obama in Bali on 17 November 2011, President Obama said, “But more importantly, we have incredible person-to-person relations between our two countries.  Obviously, the contribution of Filipino Americans to the growth and prosperity of the United States has been incredibly important.”

2012 US Census

According to the US Census 2010, the total number of Filipinos (in any combination) in the US increased from 2.36 million in 2000 to 3.42 million in 2010 or an increase of 44.5%. On the other hand, the US Embassy in Mania estimates that about 250,000 Americans currently reside in the Philippines. This has invariably enhanced people-to-people interaction at all levels. A milestone in this dimension was celebrated in 2006, the Centennial Anniversary Celebration of Filipino Migration to the United States.

Filipinos in the United States as whole are much more educated, speak English better, have higher incomes, are less likely to live in poverty, and are more apt to own their homes compared with the US general population.

Education

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.

Remittances

The US is the top source of overseas remittances with a 2011 level amounting to $8.48 billion representing 42 percent of the total remittances for 2011 according to the Bangko Sentral ng Pilipinas (BSP). As of March 2012, preliminary BSP data indicates that remittances from the US amount to $2 billion. However, BSP also notes that data are not truly reflective of actual source of remittance as the common practice of remittance centers is to course remittances through correspondent banks mostly located in the US.

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.