BACKGROUND:

Singapore was founded as a British trading colony in 1819. It joined the Malaysian Federation in 1963 but separated two years later and became independent. It subsequently became one of the world’s most prosperous countries with strong international trading links (its port is the world’s busiest in terms of tonnage handled) and per capita GDP equal to that of the leading nations of Western Europe.

National Day : Independence Day, 9 August (1965)

Constitution : 3 June 1959, amended 1965 (based on Pre-independence State of Singapore Constitution

Population : 4,492,150 (July 2006 est.)

Ethnic Groups : Chinese (76.8%), Malay (13.9%), Indian (7.9%), others (1.4%) – 2005 census

Principal Languages : Chinese (official), Malay (official and national), Tamil (official), English (official)

Major Religions : Buddhism (Chinese), Islam (Malays), Catholicism, Hinduism, Taoism

Area : 699.4 square kilometers

Location : Southeastern Asia, islands between Malaysia and Indonesia

Capital : Singapore

GOVERNMENT

Type : Parliamentary Republic

Head of State : President S. R. Nathan or Sellapan Ramanathan

Head of Government : Prime Minister Lee Hsien Loong

Foreign Minister : Foreign Minister George Yeo

Legislative Branch : Unicameral Parliament (84 seats; members elected by popular vote to serve five-year terms)

Judicial Branch : Supreme Court (Chief Justice is appointed by the President with the advice of the Prime Minister, other judges are appointed by the President with the advice of the Chief Justice; Court of Appeals)

National Elections : President elected by popular vote for a six-year term; President S.R. Nathan assumed his second term on 17 August 2005 upon failure of other candidates to secure a Certificate of Eligibility. He was likewise proclaimed President without contest in 1999; following legislative election. The leader of the majority party or the leader of a majority coalition is usually appointed Prime Minister by the President; Deputy Prime Ministers appointed by the President).

ECONOMY

Singapore, a highly developed and successful free market economy, enjoys a remarkably open and corruption-free environment, stable prices, and a high per capita GDP. The economy depends heavily on exports, particularly on electronics and manufacturing. It was hard hit in 2001-2003 by the global recession and the slump in the technology sector. The government hopes to establish a new growth path that would be less vulnerable to the external business cycle and will continue efforts to establish Singapore as Southeast Asia’s financial and high-tech hub. Fiscal stimulus, low interest rates, a surge in exports, and internal flexibility led to vigorous growth in 2004, with real GDP rising by 8 percent, by far the economy’s best performance since 2000.

Major Industries : electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, offshore platform construction, ship repair, entrepot trade, life sciences

Monetary Unit : Singapore dollar (SGD)

GDP (PPP) : $124.3 billion (2005)

GDP real growth rate : 6.4% (2005)

Per capita (GDP) : $28,100 (2005)

Inflation Rate 0.4% (2005)

Labor Force : 2.28 million ( September 2005 est.)

Unemployment Rate : 3.1% (2005)

Current Account Balance : $32.74 billion (2005)

Imports : $188.3 billion (2005)

Import Partners : Malaysia (14.4%), US (12.4%), China (10.8%), Japan (10.1%), Taiwan (6.2%), Saudi Arabia (4.7%) and Korea (4.5%) (2005 est.)

Exports : $204.8 billion (2005)

Export Partners : Malaysia (14.7%), US (11.5%), Hong Kong (10.4%), China (9.5%), Japan (6%), Thailand (4.5%), Taiwan (4.3%) and Australia (4.1%) (2005 est.)

The Philippines opened a consulate in Singapore in 1966, the year after Singapore achieved independence. Full diplomatic relations were established in August 1969 with the upgrade of the consulate to an embassy.

Bilateral relations have been cultivated through frequent exchanges of visits by high-ranking officials. Bilateral meetings have been held at the sidelines of annual meetings such as the ASEAN Ministers’ Meeting, the United Nations General Assembly, and the ASEAN Summit, among others.

Secretary Romulo met with PM Lee, Pres. Nathan and FM Yeo on separate occasions to discuss the current state of bilateral trade between the Philippines and Singapore and the possibility of having more Singaporean investments in the country. The meetings also served as an opportunity to convey President Gloria Macapagal-Arroyo’s appreciation for Singapore’s fair and good treatment of Filipinos in Singapore.

Secretary Romulo informed the Singapore Leaders of the preparations of the Philippines for the 12^th ASEAN Summit in Cebu in December. He sought Singapore’s support for the Philippine initiatives for the Summit. In doing so, he underlined the need for Singapore and the Philippines to work closely together for the next two years since Singapore is the Vice Chair of ASEAN.

Foreign Minister Yeo met with Secretary Romulo at the sidelines of the 39^th ASEAN Ministerial Meeting in Kuala Lumpur, Malaysia. They shared their views on the entry of Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships (ReCAAP) as well as the bilateral agreement on mutual cooperation on the deployment of air marshals.

Furthermore, Foreign Minister Yeo gave some views and ideas on how the Philippines should host the ASEAN Summit in December as well as that of the East Asia Summit (EAS).

Foreign Minister Yeo discussed with President Gloria Macapagal-Arroyo the possible participation of Singapore’s SingPower in the bidding of Transco and the holding of bilateral talks on the air services agreement for tourism promotion. They also discussed ASEAN matters like the drafting of the ASEAN Charter and the East Asia Summit (EAS) membership.

Foreign Minister Yeo met with Secretary Romulo to discuss ASEAN issues like Myanmar, ASEAN integration, membership in EAS as in the case of Russia, the ASEAN Charter as a statement of ASEAN’s political will, and the possible creation of an ASEAN Maritime Forum. They also discussed the proposed Status of Forces Agreement (SOFA) with Singapore in which the Department of National Defense will draft.

They also signed the Confidential Memorandum of Understanding (CMU) on Mutual Cooperation on the Deployment of Air Marshal on the same day, which seeks to strengthen international law enforcement on aviation security pursuant to international conventions and protocols.

Prime Minister Lee met with President Gloria Macapagal Arroyo, Senate President Franklin M. Drilon, House Speaker Jose De Venecia Jr., and Senator Richard Gordon. He and his delegation also had an expanded bilateral meeting with President Arroyo and representatives of key government agencies.

During his meeting with President Arroyo, both leaders discussed initiatives to enhance Philippines-Singapore bilateral relations. Among the initiatives discussed were the expansion of air linkages, the entry of budget airlines, tourism, counter-terrorism, defense, Philippine domestic reforms, and the peace process in Mindanao.

The expanded bilateral meeting covered trade, investments, tourism, air services, information technology, defense cooperation, ASEAN integration, counter-terrorism, and Filipinos in Singapore.

The meeting with the legislative officials focused on Singapore investing more in the Philippines, addressing the security situation of the Philippines, the proposals of establishing an Asian parliament, the establishment of a fund that will finance reforestation projects in the Philippines, housing programs, and the Asian Anti-Poverty Fund.

Discussions during the 1^st Consultations on the PSAP covered the following: a) strengthening ASEAN to make it more responsive in engaging the powers in the region; b) the relocation of the Bayanihan Center, and c) the direct communication of agencies implementing bilateral initiatives such as those on culture, people-to-people exchanges, education, information technology, tourism, capital market development, economic cooperation, and military cooperation.

Secretary Romulo and Foreign Minister George Yeo discussed the forthcoming visit of Prime Minister Lee Hsien Loong in December 2004, the improvement of trade and commercial ties, the possibility of Singapore establishing more industrial parks in the Philippines similar to that of the Carmelray Industrial Park II, Philippine support for Singapore’s bid to host the Information Sharing Center for Anti-Piracy in Asia and the Pacific, President Arroyo’s ten-point agenda and eight-point realities, the importance of ASEAN, and the progress of peace and development efforts in Mindanao.

Former Secretary Albert met with then Prime Minister Goh Chok Tong and then Foreign Minister S. Jayakumar.

Discussions with Prime Minister Goh concentrated on his concerns over developments in Indonesia and Malaysia, particularly the changes in leadership and the role of Islam.

In her meeting with Foreign Minister Jayakumar, they discussed the healthy economic and political relationship of the two countries, the fight against terrorism, the early convening of the informal consultations on the PSAP, and the construction of a new MRT line that will affect the Bayanihan Center in Singapore, among others.

III. Philippines-Singapore Bilateral Trade and Investment

Source: DTI-Tradeline Philippines

Singapore remains the Philippines’ largest trading partner in Southeast Asia and the 14^th in the world. As of December 2005, bilateral trade with Singapore grew to US$6.30, accounting for 7.32% of Philippines’ total trade with the world. Exports to Singapore reached US$2.7B or 6.56% of total Philippine exports to the world. On the other hand, the Philippines imported from Singapore about US$3.59B or 8% of total Philippine imports from the world. Electronic products continued to dominate bilateral trade, accounting for about 67% of trade volume. This is due to complementary collaboration between both countries in the electronics manufacturing chain.

The Philippines posted negative trade balance with Singapore for 2005 as with 2004. This negative growth mainly reflected a more moderate world demand for electronics. Although worldwide semiconductor sales remained healthy for the rest of 2004, growth slowed sharply end of the year. Slowdown in the global semiconductor cycle, concerns over competition in China and lingering high oil prices also influenced the extent of moderation.

Investments

Foreign Direct Investments of Singapore to the Philippines

National Statistical Coordination Board

According to DTI, Singapore continues to be the Philippines’ largest direct investment source from ASEAN for the period 2000-2005. The year 2001 saw the huge inflow of investments from Singapore, amounting to Pesos 15,769.60 million. While this amount has yet to be surpassed or repeated, Singapore investors nonetheless continue to show confidence in the Philippine economy.

Examples of Singapore companies that are present in the Philippines:

1. Singapore Computer Systems Ltd. joined Telus International Inc. of Canada to set-up a joint venture company called TISCS Pte. Ltd. to invest in a 70% interest in Ambergris Solutions Inc, a Philippine homegrown call center in February 2006.
2. Sembcorp Logistics, one of the largest Singapore logistics company, tied-up with Macro Asia Corporation to form Semblog-Macroasia Philippines to provide supply chain solutions to service manufacturing companies located in the Philippines.
3. SIA Engineering and Cebu Pacific Air in Line Maintenance Services Joint Venture known as Aviation Partnership (Philippines) Corporation to provide line maintenance service to third party customers.
4. Singtel also increased its stake in Globe Telecom to 44.6% to become its biggest stakeholder.
5. Prima Taste, a Singaporean manufacturer of ready-to-cook pastas and premixes, opened its second concept restaurant called "Rasa."
6. BreadTalk
7. Charles & Keith and Mphosis, a ladies footwear and a ladies fashion boutique respectively, continued to expand their business.
8. Jetstar Asia.
9. Tiger Airways.
10. Keppel Land, a Singaporean real estate developer, and SM Group in a joint venture known as SM Keppel Land to develop a mixed-use development project in Ortigas Center which includes The Podium, an upscale shopping mall.

The Philippines-Singapore Business Council (PSBC) was formed in 1994 as a platform for senior business executives from both countries to promote greater business cooperation. It continues to be one of the most active business councils in the Philippines. Apart from meeting annually, the Council also actively supports and organizes activities to foster closer interactions between the private sectors of both countries.

The 9^th PSBC meeting was held in Shangri-La Mactan Hotel in Cebu on 8 November 2004. International Enterprise Singapore, formerly known as Singapore Trade Development Board, organized a five-day mission to Cebu and Metro Manila to coincide with the meeting.

IV. Filipinos in Singapore, 2006 estimates

Estimated number of overseas Filipinos in Singapore as of June 2006

Distribution of Filipinos according to profession as of June 2006

Singapore Laws Affecting Foreign Workers in Singapore

Beginning 2005, the Singapore Ministry of Manpower (MoM) introduced the following changes in the city-state’s labor laws and regulations affecting foreign workers:

MoM increased the minimum age requirement for foreign domestic workers (FDWs) from 16 to 23 years old and introduced a minimum requirement of 8 years of formal education and documentary proof of such.

MoM introduced the FDW Safety Awareness Course (FDW-SAC) in April 2005 for all FDWs in Singapore. The FDW-SAC seeks to raise the awareness of FDWs on domestic safety (with focus on living in high-rise buildings), inform them of their basic rights and obligations, and orient them to their new life in the city-state. A FDW guidebook was also provided. A Tagalog version of it will be produced in 2006 with the assistance of the Philippine Embassy in Singapore.

MoM also introduced a program for first-time employers to sensitize them to issues affecting FDWs. It includes the following:

1. Entry test requirements for FDWs to ensure that they understand basic safety instructions, numeracy, and English literacy skills; and

2. Ensuring payment of salaries of foreign manpower within seven days after the month for which work was done.

V. Concluded Bilateral Agreements

A. Convention between the Republic of the Philippines and the Republic of Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Manila, 1 August 1977.

B. Implementing arrangement to the Agreement between the Republic of the Philippines and the Republic of Singapore for the Stationing of a Republic of Singapore Air Force Detachment at Clark Air Base for Continuation Training, signed in Manila on 25 and 26 July 1979.

C. Exchange of Notes concerning the arrangement for the stationing of Royal Singapore Air Force Detachment (RSAFD) to undergo continuation training of the RSAF Pilots at Clark Air Force Base, dated 10 September 1976 and 16 January 1979, signed in Manila and entered into force in 16 January 1979

D. Exchange of Notes amending the arrangement made in the Basic Agreement in the form of Exchange of Notes dated 10 September 1976 and 16 January 1979 concerning the stationing of a Republic of Singapore Air Force Detachment (RSAFD) at Clark Air Base for continuation training of the RSAF Pilots, dated 8 June 1979 and 3 July 1979, signed in Manila and entered into force 3 July 1979.

E. Memorandum of Understanding between the Government of Singapore and the Government of the Philippines concerning the Participation of the Republic of Singapore Air Force (RSAF) in Cope Thunder Exercise 84-4, signed in Manila on 8 December 1983 and 12 December 1983.

F. Memorandum of Understanding between the Government of the Republic of the Philippines and the Government of Singapore concerning participation of the Republic of Singapore Air Force (RSAF) in Cope Thunder Exercise 87-2, signed in Manila on 3 and 5 October 1986.

G. Memorandum of Understanding on Joint Military Exercise between the Republic of the Philippines and the Republic of Singapore, signed in Manila, 5 May 1994.

H. Memorandum of Understanding on Cultural Cooperation between the National Commission for Culture and the Arts of the Republic of the Philippines and the National Arts Council of the Republic of Singapore, signed in Manila, on 10 June 1997.

I. Philippine-Singapore Action Plan signed on 14 December 1998

J. Memorandum of Understanding between the National Commission for Culture and the Arts and the National Arts Council on the Philippines-Singapore Cultural Cooperation Programme, signed in Singapore, on 25 August 2001.

K. Memorandum of Understanding between the Republic of the Philippines and the Republic of Singapore on Tourism Cooperation, signed in Singapore, on 25 August 2001.

L. Undertaking between the Government of the Republic of the Philippines and the Government of the Republic of Singapore Concerning the Recognition of Certificates Under Regulation I/10 of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978, as Amended, signed in Singapore, on 25 August 2001.

M. Confidential Memorandum of Understanding on Air Transport between the Republic of the Philippines and the Republic of Singapore, signed in Singapore, on 25 August 2001.