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The Philippines consists of over 7,000 islands in southeast Asia, surrounded by the South China Sea, the Philippine Sea, and the Sulu Sea. The total land area is 186,411 square miles and the population in 2011 was 101,833,938, the 12th-largest in the world. The country was a Spanish colony from the 16th century, was ceded to the United States in 1898, became self-governing in 1935, and independent in 1946. The United States maintained military bases in the Philippines until 1992. The islands are volcanic and the terrain is mountainous, with some coastal lowlands. Almost half (49 percent) of the population lives in urban areas; major cities include the capital, Manila (11.4 million est. population in 2009 in the metropolitan area), Davao (1.5 million), Cebu City (845,000), and Zamboanga (827,000).

Per capita gross domestic product (GDP) in 2010 was $3,500 (ranking 161st in the world) but with a relatively high growth rate of 7.3 percent (21st in the world) and an industrial production growth rate of 12.1 percent (13th in the world). The primary GDP sectors are services (54.8 percent), industry (31.3 percent), and agriculture (13.9 percent). In 2006, 32.9 percent of the population lived below the poverty line and the Gini index was 45.8, 36th highest in the world. Over 20 percent (22.6 percent) of the population live on less than $1.25 per day (an improvement from 1991, when 30.7 percent of the population met this standard) and about 15 percent of the population are undernourished (also an improvement from 21 percent in 1990–92). Major exports include semiconductors and electronic products, transportation equipment, clothing, copper products, petroleum products, coconut oil, and fruits. Remittances from migrant workers constituted over 10 percent of GDP in both 2008 and 2009. Transparency International gave the Philippines a Corruption Index score of 2.4 in 2010, on a scale from 0 (highly corrupt) to 10 (very clean).

Growth of the Middle Class

One phenomena observed in the Philippines, as in many Asian countries, is the emergence and growth of a middle class (defined in the Philippines by daily expenditures in the range of $2 to $20 in 2005 U.S. dollars). The middle class in the Philippines increased from 44 percent of the population in 1988 to 54 percent in 2006, meaning that about 21 million people were added to the middle class during those years. Members of the middle class are more likely than the poor to live in cities and to work at salaried jobs, rather than be self-employed. Individuals and families who define themselves as middle class have a higher demand for durable consumer goods and increased expectations regarding matters like education and healthcare (and government-sponsored improvements in these sectors often benefit the middle class more than the poor).

In 2006, 44.9 percent of households in the Philippines with per capita income below $1.25 owned a radio, 26.1 percent owned a television, 0.3 percent had air conditioning, 3.3 percent owned a refrigerator, 1.9 percent owned a motorcycle or scooter, and 0.2 percent owned a car. For households with per capita incomes in the $10–$20 range, 72.3 percent owned a radio, 96.1 percent owned a television, 45.3 percent had air-conditioning, 88.9 percent owned a refrigerator, 18.8 percent owned a scooter, and 39.9 percent owned an automobile. The percentage of the population in a given income class owning specific consumer goods is higher in the Philippines than in China or India, although the latter countries, because of their larger populations, may represent larger absolute numbers of households owning goods such as an automobile or air conditioner.

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