Country Report Philippines June 2011

Outlook for 2011-15: International relations

Relations with the US will remain of paramount importance for the Philippines in 2011-15. Aside from historical connections-the Philippines was once a US colony-ties are strong for a number of reasons, including an important commercial relationship (the US is the Philippines' largest trading partner) and close military associations (the US army provides support for the government's campaign against Muslim separatists on Mindanao). US military presence will continue to take the form of intelligence support and joint training exercises. China's importance as a trade partner and a source of investment will grow in the forecast period. Under diplomatic pressure from China, Mr Aquino chose to side with the likes of Cuba, Iran and Venezuela in boycotting the December 2010 ceremony at which Norway's Nobel committee awarded a peace prize to a Chinese dissident, Liu Xiaobo But the status of the Spratly Islands in the South China Sea will remain a source of tension between the two countries.

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