Political violence mounted in run-up to 10 May general elections. Police claimed 33 people killed and 86 wounded in at least 23 election-related attacks. Supreme Court ruling on whether popular presidential candidate Fernando Poe able to stand for office expected early March; a ruling against Poe will probably lead to violent demonstrations. Ferry explosion 29 February – approximately 180 missing - Islamist terrorist group Abu Sayyaf’s claim of responsibility dismissed as propaganda by government. Moro Islamic Liberation Front (MILF) and government agreed to resume peace talks in April and to prepare for immediate deployment of Malaysian-led international ceasefire monitoring team. Eight police killed by Communist New People's Army (NPA) ambush on central Philippine island of Masbate 16 February. Attack came 2 days after government and National Democratic Front (includes Philippines Communist Party and their armed faction NPA) concluded peace talks. Talks to resume in March.

President Arroyo announced progress in peace talks with rebel groups. Exploratory talks announced for February between government and secessionist Moro Islamic Liberation Front (MILF). Bomb in Mindanao linked to local political rivalries killed 10. Formal talks between government and communist New People's Army (NPA) also to resume in February. NPA attacked power plant 10 January killing 3. President Arroyo met Malaysian PM Badawi in Manila for talks on southern peace process. Malaysia to send truce monitors. Military officers under investigation following accusations that defence secretary ordered soldiers to spy on opposition candidates for presidential elections.

Election campaigning gathered momentum. Fernando Poe, film actor and close friend of deposed President Estrada, ahead of President Arroyo in opinion polls, but opposition divided. Commander of Abu Sayyaf rebel group, Galib Andang, captured 7 December. Government capture operation provoked gun battles with aligned Moro Islamic Liberation Front (MILF) rebels, killing at least 14. Ceasefire with MILF re-established 17 December and formal peace negotiations expected to resume soon after Malaysia sends team of 25 observers to Mindanao. Five killed in clashes between insurgent New People’s Army (NPA) and government troops 7-8 December; immediately followed by unilateral declaration of Christmas ceasefire (10 December – 6 January) by government.

Anti-government sentiment rising in wake of President Arroyo’s u-turn announcement to run in 2004 elections. Fernando Poe, film actor and close friend of deposed President Joseph Estrada, also announced intention to run. Government declared military “red alert” 3 November to preempt instability from opposition-led impeachment bid against chief justice; military vowed to stay neutral. Three-hour siege by two armed men (including former aviation official with links to July mutineers) at Manila airport 8 November protesting corruption resulted in deaths of both. Thousands took to streets 11 and 14 November calling for president to step down. Formal peace negotiations with MILF expected to resume soon after Malaysia agrees to send team of 25 observers to Mindanao. Despite July ceasefire, government forces clashed with MILF rebels 11 November, killing 13, including two rebels and two police.

Indonesian Jemaah Islamiyah (JI) member Taufik Rifki arrested 2 October; Philippine police call him key leader. Raid by military in Mindanao 19 October turned up bomb-making materials and instructions, and documents referring to JI, fuelling suspicion of cooperation between Indonesian and local militants (MILF denies links). After escaping jail in July, Indonesian JI leader Fathur Rohman al-Ghozi killed in alleged shoot-out with government troops 13 October. Al-Ghozi given martyr’s burial when body returned to Indonesia. Despite July ceasefire, government forces clashed with MILF rebels in Zamboanga 14 October, killing five. Talks underway in Norway between government and communist rebels, New People’s Army.

July ceasefire between government and MILF holding – informal discussions took place on 6-7 September in Kuala Lumpur resulting in agreement to hold fresh round of formal peace talks in October following arrival of Malaysian-led ceasefire observation team. 31-year war has thus far cost over 120,000 lives. Eduardo Ermita, chief government negotiator in peace talks with Muslim rebels, appointed as new defence secretary.

Government lifted “state of rebellion” on 11 August. Soldiers who staged attempted coup in July put on trial. Defence Secretary resigned on 29 August - President Arroyo assumed post. 2 members of terrorist group Abu Sayyaf arrested - under interrogation claimed Abu Sayyaf was planning bombings in Mindanao in October. July ceasefire between government and MILF holding - peace talks due in Malaysia on 4 September.