Situation in southern islands deteriorated with further violent clashes and bombings. Incidents between soldiers and supporters of Moro National Liberation Front leader Nur Misuari killed at least 25 soldiers, 100 rebels in 2 weeks on island of Jolo. ICRC estimated 27,000 civilians displaced by conflict. Bombs in Manila, General Santos City, and Davao 14 February killed at least 8. Abu Sayyaf claimed responsibility: 2 members arrested for Manila bombing said to have been trained by JI operatives in Lanao del Sur; 10 Abu Sayyaf rebels killed 24 February when troops captured Jolo camp.

Peace talks remain scheduled for early February despite worst fighting of 17-month “truce” between government and Moro Islamic Liberation Front (MILF): 28 killed in 9-10 January attack in Mamasapano, south of Cotabato city, by forces of MILF commander Abdul Rahman Binago, whose brother, leader of Abu Sofia bandit group, killed previous week. MILF leadership stressed attack not sanctioned. Philippine air force launched air strikes 27 January in Datu Piang against MILF guerrillas and area where suspected Jemaah Islamiyah militants believed to be meeting. Three improvised bombs found Cotabato and Sultan Kudarat province. Seventy U.S. special forces troops remain Mindanao working with Philippine security forces to locate foreign militants and rebel forces.

Powerful bomb exploded 12 December in General Santos city market southern Mindanao region, killing 14, injuring 70. No claim of responsibility. Government and New People’s Army (NPA) announced ceasefires for Christmas celebration from 16 December to 5 January. Soldiers and NPA rebels clashed in Negros Occidental province in central Visayas region 20 December; 1 rebel and 1 soldier killed. Moro Islamic Liberation Front reportedly agreed to resume peace talks with government in February after talks ended in Malaysia 22 December.

MILF filed protest with Malaysian-led International Monitoring Team after military reportedly launched aerial assault on MILF area in Maguindanao province, Mindanao. At least 10 killed in attack, reportedly against Abu Sayyaf group and kidnapping gangs. Military chief claimed action not in violation of truce. Police-protester clashes over job cuts and land reform at plantation owned by family of former President Tarlac province left at least 7 dead.

Soldiers from Brunei joined 50 Malaysian observers 20 October to monitor truce between rebel Moro Islamic Liberation Front (MILF) and Philippine government. Ceasefire and International Monitoring Team are MILF preconditions for peace talks with government - expected to resume after Ramadan. Talks with New People’s Army, armed wing of Communist Party of the Philippines (CPP), remain stalled after President Gloria Arroyo ordered review of peace negotiations with leftist groups because of their links with international terrorist organisations, sparking accusations of peace-talk sabotage from National Democratic Front, political arm of CPP.

Moro Islamic Liberation Front (MILF) and government to formally resume peace talks early October, including long-delayed discussion of political and economic issues; MILF to propose autonomous rule. Persistent reports linking MILF to Jemaah Islamiyah (JI) denied by MILF. Government to hold separate talks with MILF on how to remove JI and criminal gangs from Mindanao. Malaysian inspection monitors advance team arrived Mindanao 10 September; scheduled inspection of MILF base in Cararao mountains postponed until after Ramadan. Military attacked base of New People's Army, military wing of communist National Democratic Front (NDF), 23 September, killing 9. Attack came after August breakdown of talks between government and NDF.

Communist National Democratic Front (NDF) asked for postponement of new round of peace talks in Norway after U.S. kept NDF on terrorist list. NDF military wing, New People’s Army, clashed with government troops 6 August; 20 killed. Military helicopters launched assault on kidnapping syndicate “Pentagon gang”, who have ties to Moro Islamic Liberation Front (MILF), in southern Mindanao 13 August, killing 14 gunmen. Peace talks between Philippines government and MILF delayed over terms for peace monitors. Malaysia (and other Muslim nations) to send 60 monitors to oversee truce between MILF and government. Seventeen Abu Sayyaf members sentenced to death 13 August for kidnappings and beheadings between 2000-2001.

Peace talks with Moro Islamic Liberation Front (MILF) further delayed due to disagreement over presence of government troops in former rebel base on Mindanao and failure to drop terrorism charges against MILF leaders. President Arroyo received domestic praise, international criticism for withdrawing 51 peacekeepers from Iraq to save hostage.

Unexpectedly smooth election process concluded 23 June as Congress declared President Gloria Macapagal Arroyo winner of 10 May elections. Supporters of defeated Fernando Poe Jr. protested against result, claimed fraud. Post-election security fears heightened as 3 explosive devices found in Manila outside Catholic church, interior and defence department buildings 20-21 June. National security adviser Norberto Gonzales said new government to give leaders of Moro Islamic Liberation Front less than 6 months to expel 30 Jemaah Islamiah members believed to be using its hideouts in southern Mindanao island. Government held talks with Communist National Democratic Front (NDF) in Norway 22 June. Talks focused on social/economic reforms, support from government for removal of NDF from EU and U.S. terror lists, and release of prisoners. No significant advances - talks to resume in August.

Unofficial election results put Fernando Poe Jr. behind incumbent President Gloria Macapagal Arroyo, whose political allies gained control of House of Representatives and Senate. Final results delayed until mid-June. 10 May elections marred by violence and fraud accusations. Over 100 killed in 3- month run-up to poll. Senior Abbu Sayyaf leader, Usman Lidjal, arrested 21 May. 3 militants killed, 7 captured in raid to free hostages 26 May. 4 other hostages freed 24 May after ransom paid.