Although the the population of the Philippines is about 85% Roman Catholic, the southern island of Mindanao has a large concentration of Muslims (known locally as Moros. The settlement of this region by Arab traders and conversion of the local populace to Islam predates the Spanish colonization of the Philippines by a couple hundred years.
As a whole the Moros have never fully integrated into Philippine society and have been a thorn in the side of first the Spanish, then (to a lesser extent) the Americans who succeeded the Spanish as occupiers of the country , and finally the present Philippine central government. In the past few decades the unrest in the Moro areas of Mindanao has turned particularly violent. There have been frequent clashes with government troops and massacres of non-Muslims in the region. In response, there have been retaliatory vigilante and military raids against local insurgents, resulting in a spiral of almost perpetual hostilities. Treaties with rebel groups such as the MLNF (Moro Liberation National Front) and their successors / breakaway radicals, the MILF (Moro Islamic Liberation Front) have been broken, usually by Islamic separatists.
My personal reaction at one time to this chaos was that the Philippine government should let the Moros secede from the country and form their own nation as they are nothing but a huge headache. But now I understand that the region in dispute is too rich in natural resources to just give away. Also capitulation to terrorists is never a good idea. Yet the latest attempt by the government to appease the rebels was just that--de facto surrender in the form an infamous pact known as the MOA-AD (Memorandum of Agreement on Ancestral Domains) that would have allowed the Moros to create a "state within a state" called the the BJE (Bangsamoro Juridicial Entity" in the area known as the ARMM (Autonomous Region in Muslim Mindano) . If implemented, this treaty could have been a disaster for the Philippines as a whole, because it would have allowed the BJE to have total self-rule that was just about total sovereignty including their own currency, relations with foreign governments, and the option to impose Islamic law even on non-Muslims in their territory which in itself is a violation of Philippine Constitutional separation of Church and State.
This treaty got as far as it did thanks to backing of Philippine President Gloria Arroyo. Presently we will see why she supported the MOA even though it would have been against the interests of the country. Fortunately, the Supreme Court issued a Temporary Restraining Order against the agreement, so negotiations with the Moros are heading back to square one. Perhaps this is just as well, considering the consequences of granting near-independence to the BJE. The MOA would have at the very least required a change in the Constitution that would have altered the political structure of the country into a federal system which would have allowed Arroyo to stay in power beyond the end of her elected term in 2010. Importantly, the MOA would set a bad precedent that could fragment the country. After all, there are other indigenous groups in the Philippines whose "ancestral domain' claims are just as valid as that of the Moros. What's to keep them from likewise demanding self-determination over their respective territories?
Moreover, if the Moros are granted self-rule or even complete sovereignty the ARMM, they would not likely be satisfied with this concession. They would likely demand and bully for more and more land, utilizing violence in the process, which is how they achieved their initial claim. Would there ever be an end to it? Would the Moros eventually declare war on the central government?
What is really curious about the MOA is that it had the support of the United States. One would think that the last thing America would do is support a treaty that in effect knuckles under to Islamic terrorists. Yet at the same time, the U.S. is furnishing military and financial aid to the Philippine government in fighting these extremists. For a comprehensive and fascinating discussion on why the U.S. is playing this double game, see "US plays both sides in the Philippines".
Recently the Philippine government dropped its backing of the MOA. President Arroyo is now pretending that she was not happy with the terms anyway (yeah, right), and so the whole matter has been rendered moot.--or has it? The Supreme Court still intends to review the matter further. See "Decide the MOA issues fully".
What this all comes down to is that Philippine unity is weak enough as it is due to the various regional and language divisions , and the demand of any one group should not be allowed as basis for tearing the nation asunder.