Military expenditures - dollar figure: $1.3 billion (FY98)

Military expenditures - percent of GDP: 2% (FY98)

@Peru:Transnational Issues

Disputes - international: demarcation of the agreed-upon border with
Ecuador was completed in May 1999

Illicit drugs: until recently the world's largest coca leaf producer, Peru has reduced the area of coca under cultivation by 24% to 38,700 hectares at the end of 1999; most of cocaine base is shipped to neighboring Colombia, Bolivia, and Brazil for processing into cocaine for the international drug market, but exports of finished cocaine are increasing by maritime conveyance to Mexico, US, and Europe

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PHILIPPINES

@Philippines:Introduction

Background: The Philippines were ceded by Spain to the US in 1898 following the Spanish-American War. They attained their independence in 1946 after being occupied by the Japanese in World War II. The 21-year rule of Ferdinand MARCOS ended in 1986 when a widespread popular rebellion forced him into exile. In 1992, the US closed down its last military bases on the islands. A quarter-century-old guerrilla war with Muslim separatists on the island of Mindanao, which had claimed 120,000 lives, ended with a treaty in 1996.

@Philippines:Geography